HMIE Audit and Risk Committee
Wednesday 10 February 2010 at 10:40am
Boardroom, Denholm House, Livingston
HMIE
Sir Andrew Cubie (Chair)
David Morrison (DM)
Gill Robinson (GNR)
Stuart Robinson (SAR)
Gillian Howells (GH)
Laura Burman (LB)
Apologies:
Pearl Marshall
Shirley Young
Geoff Lees
Phil Denning
Graham Donaldson
Minutes:
Linsey Wilson
Audit
Ruth Brown (RB)
Scotland
Internal
Audit
Douglas Falconer (DF)
Welcome and apologies
Noted: AC noted apologies from Pearl Marshall, Shirley Young, Geoff Lees and Phil
Denning. AC looked forward to working with Bill Maxwell, the new HM Senior Chief
Inspector, and noted that GHCD’s contribution to HMIE had been significant. AC
commented on the fact that the Committee was meeting after the Management Board
meeting, this had been due to particular circumstances, it would be important to ensure
that the correct cycle resumes.
1. Minutes of the meeting held on 16 September 2009
The minutes of the previous meeting were accepted.
2. Matters arising
HMIE Performs – Quarterly report
Noted: SAR updated the Committee on discussions within HMIE on responding to
complaints deemed not to be within HMIE’s remit. Looking at this issue had raised a
larger question about the current complaints procedure and whether a more significant
review was required. HMIE had originally agreed on a broad definition of complaints to
ensure that all information was captured, but a comparison to other organisations’
procedures (e.g. Ofsted) suggested that a more focused approach might help to simplify
arrangements. Other considerations included taking another look at the degree of
externality built-in to the procedure and whether this could be increased. SAR noted that
one suggestion could be to give the non-executives a role in relation to oversight of a
revised complaints procedure. AC confirmed that it would be important to model
something quickly regarding such procedures, and that the external members of the
Audit and Risk Committee should have an enhanced role. AC asked SAR to give an
update on delays of adding additional non-executives to the Board and the Committee,
reminding members that previous guidance indicated that the Audit and Risk Committee
should be made up of solely non-executive members. SAR advised that there was still a
need to await the outcome of the review of the agency model, which had been
commissioned by Sir John Elvidge. The Shaping Up Review has already been
published, and the agency review outcome was expected soon. SAR also referred to the
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need to review HMIE’s Framework Document as the current version dated back to 2007,
GHCD had suggested that HMIE be used as a pilot by SG to help develop a model for
future use. HMIE would move progress with these changes once the agency model
review has been published. SAR further noted that Audit Scotland was carrying out a
study of the role of non-executives; this was due to be published in the spring. It was
agreed that AC and DM would be used as reference points as drafts emerged of the new
complaints procedure in advance of the next meeting in May.
Action 1: AC and DM should be included in development of options for a new complaints
procedure to allow them to comment on the draft in advance of the May meeting.
Agreed 2: AC noted that when the advertisements were crafted for recruiting the
additional non-executives, it would be useful to send these before publication to both AC
and DM to allow them to comment.
Noted: SAR updated the Committee on HMIE Performs. Discussions were taking place
with all directorates to elicit views on the report and how to embed its production into
existing management reporting arrangements.
Action 3: A revised version of the HMIE Performs report should be sent to Committee
members to provide them with an opportunity to comment further if required.
3. Annual Audit Plan 2009/10
Noted: RB updated the Committee on the Annual Audit Plan 2009/10. DM noted that
the main areas of risk were clearly identified in the plan and focused in particular on the
risk presented by the reduced funding available for 2010-11. SAR advised that detailed
planning had already identified where savings could be made. DM asked if there was an
overview to how these savings would be achieved and if so whether it could be shared
with the non executives.
Action 1: SAR to copy SMG paper on achieving savings to live within budget to the non
executives.
Noted: DM questioned if there was a risk to quality and the level of assurance afforded
by the inspection model if our approach were to be scaled back to help achieve savings.
SAR noted that an awayday was planned for 24 March, which would explore current
approaches to inspection and identify views of stakeholders. Continued assurance
would be a key consideration in any proposed developments. AC and DM both noted
that they would be willing to attend the awayday on 24 March.
Noted: AC noted there should be a formal handover of assurances from GHCD to WSM.
SAR agreed to ensure this was taken forward, probably building on the directorate
certificates of assurance. The Committee approved the Annual Audit Plan for 2009/10.
Action 2: SAR was asked to arrange for a handover of assurances between GHCD and
WSM.
4. Review of IRFS 2008/09 shadow accounts
Noted: RB updated the Committee on the 2008/09 shadow IFRS accounts. RB raised
the issue of a requirement for a letter of comfort from the Scottish Government (SG) with
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regard to HMIE’s balance sheet. She confirmed that this had been queried and that SG
had advised that they saw no need for a letter of comfort given HMIE’s funding is
consolidated within the overall SG accounts. AC noted that he was uncomfortable about
this position and suggested a further approach to SG might be required. AC noted the
proposal to cover the negative balance sheet position through a detailed note to the
accounts, but reiterated that he would prefer a letter of comfort. He advised that he
would like to see a copy of the correspondence with SG in order to consider the detail of
their response before deciding whether to ask SG to reconsider their position.
Action 1: GH to send email from SG to both AC and DM to inform their considerations
regarding a letter of comfort.
5. Internal Audit Plan 1/4/10 – 31/3/11
Noted: DF updated the Committee on the internal audit plan. Annex A of the document
focused on the audit plan for 2010/11, with annex B detailing a focus on particular areas
of the agency. SAR noted that it would be helpful to have the views of non-executives in
considering auditing the inspection programme. Internal audit in this area had proven
difficult, given the considerable expertise involved in being able to evaluate the
effectiveness of the inspection models. AC asked what would add greater rigour in
establishing assurance around inspection. SAR noted that, to an extent, there is
externality already in place due to the number of external reference groups within the
organisation and work commissioned through George St Research. AC indicated that it
would be helpful for further consideration to be given to how to secure further assurance
on the effectiveness of inspection models.
Noted: AC noted that in relation to the internal audit paper there should be some
changes to it e.g. to include possibly a review of change management arrangements and
a reprioritisation of the areas to be looked at in 2011/12.
Action: A paper on options for further assurance around the inspection programme to be
considered for a future Committee meeting.
6. HMIE Finance Report
Noted: SAR updated the Committee on the expected out-turn for 2009-10. HMIE had
been successful in reducing expenditure so that the end-year forecast was no longer as
tight as it had been previously. All publications were now web-based only, and a number
of events had been cancelled by the organisation. The delegated budget to Directorates
had also had a significant impact in controlling spending. DM noted that this looked like
a positive effort in controlling overheads.
7. Risk Management update
Noted: LB updated the group on the RAG report identifying all corporate risks, and
questioned if the style of report was helpful to the group. DM noted that it would be
useful to have the report ordered showing risks from high to low. AC noted that it would
also be useful to have a greater degree of differentiation in the risks, as the ‘Medium’
category seemed fairly broad.
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Noted: LB updated the committee on the success of the specific HMIE H1N1 continuity
planning and how that had been taken forward in supporting continuity around recent
cold weather disruption.
8. Review of arrangements for reporting and handling cases of fraud
Noted: SAR noted that HMIE had a responsibility for reviewing the policy and guidance
around fraud arrangements on an annual basis. He confirmed that a review had recently
been carried out on fraud arrangements and it had been confirmed that adhering to
existing SG policies remained appropriate. All HMIE staff had also been asked to
undertake on-line training on IT security part of which was an assessment that helped
gauge awareness and understanding.
9. Certificates of Assurance
Noted: SAR advised that the Certificates of Assurance have been updated to cover the
implementation of a procurement capability assessment and the introduction of HMIE
Performs. DM questioned whether there was scope to streamline the CoAs to remove
significant duplication.
Action: Certificates of Assurance to be streamlined into one document.
10. Any other business
Noted: AC noted that it would be unlikely that the composition of the Committee would
change in time for the next meeting in May.
Date of next meeting 24 May 2010
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