winstanley college
Approved MINUTES 16 March 2011
Minutes of meeting of
AUDIT COMMITTEE
Date of meeting
Wednesday 17 November 2010
Venue
Conference Room
Attendees
Stan Walker, Brian Davies, Grace Burtonwood, Julie Gaskell, Karen
Taylor and Charlotte Fitch (Clerk to the Governors)
By Invitation
Mike Benson (partner from Murray Smith, LLP), Joanna Bailey
(Principal) and Conor Edwards (Director of Finance & Estates)
Apologies
Karen Shaw
Distribution
All governors, Mel Chadwick (Vice Principal), Sue Edgerton (PA to
the Principal), Ross McLauchlan (Partner from Wylie & Bisset, LLP)
Meeting opened at 18.20
1. Declaration of Interest
Members had no interests to declare which would conflict with the items on the agenda.
2. Apologies for absence
Apologies had been submitted by Karen Shaw.
3. CONFIDENTIAL
Opportunity for governors to meet Financial Statements and Regularity Auditor without the
presence of management
Items were discussed with Auditors. These were matters which were identified in the
regulatory audit and are referred to in the minutes.
18.37 Management were invited to attend the meeting at this point.
4. Minutes of the previous meeting
The minutes from the previous meeting held on Wednesday 16 June 2010 were accepted as a
true and accurate record. The minutes were proposed, seconded and signed by the Chair.
5. Matter arising
06.10 item 8 In response to the Chair’s request to have sight of the ‘near miss’ reporting
form, the Director of Finance & Estates had brought a copy to the meeting. It was further
reported that the near miss reports were being recorded in health and safety reports.
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6. Review of College’s Internal Tracking Report – November 2010
Governors received the College’s internal tracking report and were satisfied that all of the
outstanding points had been completed. The Chair complemented the College on this
achievement.
7. Audit Opinion
7.1 Management Letter and Highlights Report from Murray Smith, LLP
The Chair asked the partner from Murray Smith, LLP to feedback on the management letter
following their audit of the annual accounts and regularity audit.
Mike Benson on behalf of Murray Smith drew governors’ attention to key sections within the
report.
Section one the introduction sets out the clear remit placed on the auditors to produce a
management letter which summarises the main points arising from the audit of the College’s
financial statements and regularity for the year ended 31 July 2010.
Section two a review of the College’s Income and Expenditure shows that the
College’s operating and staff costs are well managed. The College has delivered a very
healthy surplus which will support building projects especially in light of the adverse costs
incurred following the cancellation of the rebuild project by the LSC in 2009. The audit
opinion is that the College is well positioned to withstand and respond to funding cuts given
the percentage of income spent on staffing.
Student numbers are being strategically managed and will help support current staffing levels.
Section three the balance sheet shows a healthy position with circa £6m cash reserves.
Section four Audit adjustments the accounts were received well in advance of the audit
fieldwork and this was appreciated and is indicative of a well managed department. The
unadjusted error which was identified is not material to the audit opinion and relates to an
invoice crossing financial years.
Section five the auditor made clear to the committee that based on their fieldwork the
College appears to have well controlled operating procedures which is borne out by IAS
reports. The one recommendation on the internal control system relates to a tightening up of
procedures to ensure that all purchase orders have the correct signatory as part of the
College’s procurement authorisation procedures.
In response the Finance Director stated that this was an oversight during the summer period
and he doesn’t believe that there is anything fundamentally wrong with the procurement
system but he acknowledged that a further reminder to all staff and continued spot checks
would mitigate a reoccurrence.
Section six the accounting policies for the audit are very straightforward and the College
conforms to good practice in this regard.
Section seven the two audit reports relating to financial statements and regularity continue
to conform to LSC guidelines.
Section eight the financial statements auditor has reviewed IAS reports and did not believe
that any further examination was necessary given the IAS overall opinion which was reported
to the Board in July 2010.
Section nine thanks were expressed and given to the Finance Director and his staff for their
help and co-operation. These thanks were echoed by the Chair of the committee.
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RECOMMENDATION
The Audit Committee wishes to advise and recommend to the Board that the highlights and
management report from Murray Smith, LLP to governors be accepted as submitted.
The auditor will issue an unqualified and positive audit opinion.
7.2 Regularity Opinion for the year ended 31 July 2010
The regularity auditor confirmed that Murray Smith, LLP would be issuing an unqualified audit
opinion following their regularity audit.
7.3 Regularity Self assessment Report
Governors had been given sight of the College’s responses in respect of ‘regularity’ which had
been checked and verified by the regularity auditor enabling Murray Smith, LLP to give an
unqualified opinion.
7.4 Framework for Excellence
Financial Management Control and Evaluation (FMCE)
The Finance Director was asked to advise the Committee on the content of the College’s
annual self assessment under the framework for excellence. This year a shortened version
was permissible and was required by the YPLA by their deadline of 30 November 2010.
Governors reflected on the financial health outcomes and were satisfied that the grades
reflected an accurate assessment of the College’s financial health in the four areas of
accountability.
During a brief discussion governors reflected on a sensitivity analysis following the publication
of the Coalition Government’s CSR in October 2010. A number of priorities had been
identified by SMT but management had agreed that any response should await the further
detail in respect of cutbacks. The auditor supported the College’s approach in this regard,
commenting that given the College’s current healthy surpluses the College was in a fortunate
position in that it could wait until there much clearer information.
APPROVED
The Audit Committee places on record its approval for and agreement with the outcome of
the financial self assessment of Winstanley College and advises the Board that in order to
comply with the YPLA’s deadline for submission the FMCE annual return can be submitted.
8. Internal Audit Operational Plan for 2010-2011
Governors reflected on their intention to consider the allocation of 5 days for value for money
fieldwork to be carried out by the IAS during the summer term.
The audit committee noted that it had not been possible for the IAS to complete all of the
aspects identified for VfM during 2009-2010 given the time allocated to planned
maintenance. With this in mind, it was agreed that course costing should feature in this
year’s operational plan and other suggested items such as energy use/utilities would be given
further consideration.
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Action The Clerk was asked to send an email to the members of the audit committee seeking
their individual views on what aspects of VfM should be examined in addition to course
costing. The Chair asked that governors submit a return by mid December so that information
could be forwarded to the IAS. Further consideration would be given by the committee at
their March meeting.
RECOMMENDATION
As an interim recommendation the Audit Committee wishes to confirm that the IAS should be
asked to look at course costing as part of their VfM fieldwork in 2011.
9. The College’s Disaster Plan
Item for discussion
This item had been brought to the committee’s attention at their previous meeting. The BP
Gulf of Mexico disaster had flagged up a very useful marker for organisations to take heed of
and to focus attention on risks outside the normally expected and rehearsed scenarios.
With this in mind the SMT had considered and identified a number of possible disasters which
if they befell the College would require a major response and concerted action to mitigate
and deal with the disaster as it unfolded.
During an extensive and informed discussion, governors, management and Murray Smith
considered a number of scenarios and decided whether the existing RMP covered the effects
of the major disasters.
ACTION
It was agreed that the College take a further look at the disasters identified by SMT which did
not feature in the current RMP (numbers 1, 2, 3, 4, 7, 8 and 10) and incorporate them into the
current RMP and disaster plan.
The Audit Committee would like to look at the revised document at its March meeting and
take part in an impact assessment in respect of probability and impact on the College’s ability
to deliver its Mission.
10 Date of next meeting
The next meeting of the Audit Committee would take place on Wednesday 16 March 2011.
19.36 At this point in the proceedings, Mike Benson was thanked for his attendance and
participation and he left the meeting.
19.38 The meeting continued at item 11 Assessment of performance of auditors
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11. Performance of Murray Smith – the College’s Financial Statements Auditors
The Audit Committee reflected on the performance and attendance at meetings of Murray Smith, LLP
who had been appointed in July 2010 as the College’s financial statements auditor for a five year
contractual period.
During an assessment of the work undertaken by the financial statements auditors the following
aspects were listed; preparation for the audit of the annual accounts, their fieldwork and attendance
at meetings and communication with IAS. The audit committee were unanimous in their assessment
of the performance of Murray Smith, LLP as being outstanding. The detailed feedback at meetings
and the amount and relevance of their participation was valued.
12. Performance of Wylie & Bisset – the College’s IAS
Using performance measures and indicators of performance, the Audit committee completed an
assessment questionnaire and rated the performance of its IAS.
During a discussion about the ratings for key indicators, governors reflected on the performance of IAS
at meetings and the quality of their reporting. Acknowledging that deadlines were met and
attendance at meetings was good with a number of areas assessed as good or outstanding, the Audit
Committee nevertheless wished to record that an area for development was the feedback at meetings
which deserved a little more expansion and clarity.
Overall the Audit Committee is satisfied with the performance of both its audit firms.
13. Audit Committee’s Annual Report 2009-2010
It was agreed that the feedback from the previous two items would inform the relevant
sections in the annual report.
ACTION
The Chair together with the Clerk and with the agreement of the members of the Audit
Committee would complete the report which would be circulated to governors at the Board
Meeting in December 2010.
RECOMMENDATION
Subject to the outcomes of the meeting being incorporated into the annual report, the Audit
Committee wishes to recommend that the Board accept the report and the advice and
assurances contained therein to enable the Board to discharge its audit responsibilities. The
Chair signed the report on behalf of the committee.
There being no further business the meeting closed at 19.55.
Charlotte Fitch, Clerk to the governors 19 November 2010
Signed __________________________________________
Date ___________________________________________
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