MID CHESHIRE COLLEGE
AUDIT COMMITTEE
MINUTES OF THE MEETING HELD ON 14 FEBRUARY 2011
Present:
Bob Floyd (Chair)
Stephen Barnes
Jane Williamson
Member
Member
Member
In attendance:
Wanda Ford
Judith Bickerton
Keith Rushton
Alison Duncalf
Vice-Principal: Business Management
RSM Tenon (Internal Audit)
RSM Tenon (Internal Audit)
Clerk to the Corporation
The meeting opened at 8.21am.
1.
APOLOGIES
1.1
Apologies were received from Sue Harris (Baker Tilly – External Audit).
2.
DECLARATION OF INTEREST
2.1
There were no declarations of interest.
2.2
Members were reminded of the right of the Committee to go into
confidential session and (subject to the rules relating to quoracy) to
exclude any, or all, participants and observers, excepting the Clerk to the
Committee.
3.
MINUTES OF THE PREVIOUS MEETING
3.1
Resolved: that the Minutes of the previous meeting of the Audit
Committee held on 8 November 2010 be approved.
4.
MATTERS ARISING
4.1
Item 5.4, page 2 – Framework for Safeguarding – The Vice-Principal:
Business Management confirmed that the Internal Audit Report in respect
of Framework for Safeguarding had been considered by the Personnel
Committee the previous week.
4.2
There were no further matters arising that were not covered elsewhere on
the agenda.
5.
INTERNAL AUDIT REPORTS
5.1
Mr Rushton referred members to the previously circulated Internal Audit
Progress Report and the summary of the outcome of internal audit work
1
completed to date against the Internal Audit Plan for 2010-11. It was
confirmed that overall the message was good and that the Plan continued
to be on target for completion in-year.
5.2
Members noted that since the last meeting of the Committee two reports
had been finalised:- Corporate Governance and Risk Management Winsford Learning Zone Capital Project and Learner Number Systems –
Enrolments, Registers, Withdrawals and Transfers. Mr Rushton confirmed
that no major issues had been identified that would impact on the annual
opinion with an assurance level of green having been awarded for both
areas.
5.3
Mr Rushton stated that there remained four areas of outstanding work:Financial Controls; Train to Gain; Assurance Stocktake; and Follow Up. It
was confirmed these works were planned to commence in May 2011.
5.4
With respect to the Assurance Stocktake, Mr Rushton reported, that it was
previously proposed that a thematic review encompassing efficiency and
effectiveness take place, but due to the extensive level of change in the
sector it was considered to be inappropriate at this time and would now
take place in the next academic year. Members noted that following
discussions with the College it was proposed that this time now be utilised
as part of an assurance review of high level strategic risks. The VicePrincipal: Business Management added that the College was approaching
the end of a three year cycle in relation to risk management and that a
full review was planned for the latter part of the academic year.
5.5
5.6
Members noted that there had been three Client Briefings issued since the
last meeting of the Committee:- Review of Fees and Co-Funding in Further Education
- FE General Update 2010
- Bribery Act 2010 Update.
Mr Rushton went on to direct members to the appendices attached to the
paper and confirmed the following:- the work completed to date in 2010-11 including a summary of
assurance levels and recommendations
- an overview of work in progress or yet to start
- executive summaries.
Corporate Governance and Risk Management – Winsford Learning
Zone Capital Project
5.7
Mr Rushton reported that the review presented a good clean report with
no recommendations arising. Members were directed to page 7 of the
report and the identification of good practice during the course of the
audit in relation to the risk register review process and the annual reviews
of confidential minutes and their declassification.
2
Learner Number Systems – Enrolments, Registers, Withdrawals
and Transfers
5.8
It was confirmed that a good clean report and a green level of assurance
had been provided for this area. Mr Rushton added that a significant
percentage of the College’s funding was reliant on these systems.
Members noted that there were two recommendations arising in relation
to procedure notes and documentation associated with withdrawals and
transfers.
5.9
The Vice-Principal added that a new MIS Manager had been appointed and
taken up the post in July 2010.
5.10
Mr Rushton concluded that overall the College was in a good position.
5.11
Resolved: that the Internal Audit Progress Report with respect to
Corporate Governance and Risk Management and Learner Number
Systems be received and noted.
6.
UPDATED STRATEGY FOR INTERNAL AUDIT 2010-11
6.1
Mr Rushton referred members to the previously circulated report and the
Updated Strategy for Internal Audit 2010-11. Members noted that the
report had been considered at the previous two meetings of the
Committee.
6.2
It was confirmed that the report had been updated to reflect the
Assurance Stocktake and the new area of work commissioned with respect
to high level strategic risks.
6.3
Resolved: that the Updated Strategy for Internal Audit 2010-11
be received and noted.
7.
AUDIT PROGRESS REPORTS
7.1
The Vice-Principal: Business Management referred members to the
previously circulated report and an update on progress achieved in the
implementation of recommendations arising from the audit work
previously reported to the Committee in relation to:Capital Projects 2008-09 (Internal Audit – RSM Tenon)
Framework for Safeguarding (Internal Audit – RSM Tenon)
Review of Employer Responsive Activity (Internal Audit – Tenon)
Audit Findings Report (External Audit – Baker Tilly).
7.2
It was reported that all outstanding recommendations had been
implemented with the exception of the one recommendation arising from
the Review of Employer Responsiveness Activity.
The Vice-Principal
confirmed that the recommendation related to Employer Responsiveness
learners accessing Additional Learner Support. Member noted that this
related to students who essentially never came into College. The VicePrincipal stated that the new Sector Manager (Essential Skills) was
working with the Employer Services Manager to address this gap. It was
3
confirmed that this impacted on approximately 20 students mainly in the
area of Hospitality and Catering.
7.3
The Vice-Principal confirmed that progress in this area was routinely
monitored internally via the termly performance monitoring process.
7.4
Resolved: that the report and update on the progress of the
implementation of recommendations arising from audit reports
previously considered by the Committee, be received and noted.
8.
RISK MANAGEMENT
8.1
The Vice-Principal: Business Management referred members to the
previously circulated report and information on the progress made and
actions identified in the Risk Management Action Plan, together with the
current status of the top ten risks and any changes to the risk catalogue.
8.2
The Vice-Principal went on to take members through the top ten risks.
8.3
In respect of Risk 1 “Reduction in public spending/recession/funding” the
Vice-Principal stated that the reduction in public spending was of
particular concern to the College adding that following the 7% cut in Adult
Learner Responsiveness Funding for 2010-11 a detailed review of the
College’s adult delivery had been undertaken.
8.4
The Vice-Principal reported that the College was taking a number of steps
in planning for the significant cuts in income anticipated in 2011-12. The
Vice-Principal added that following the healthy recruitment of 16-18 year
olds there had been a higher level of withdrawals than anticipated which
would impact on the allocation and funding for the next academic year.
8.5
Members noted that the College was continuing to look at how it would
accommodate these cuts to funding in 2011-12.
8.6
The Vice-Principal stated that the relationship between the College and
the Skills Funding Agency (SFA) and the Young People’s Learning Agency
(YPLA) was a very different relationship to that with the Learning and
Skills Agency (Risk 2 “Machinery of Government Changes”).
8.7
In terms of Risk 3 and “Competition from new and existing educational
establishments” the Vice-Principal outlined the College’s response to the
new Winsford Academy which included more aggressive marketing
campaigns, particularly where there was direct competition for courses. It
was noted that the Academy had recently received approval for a £20m
new build.
8.8
The Vice-Principal reported that the College had encountered a very
challenging process in accessing capital monies to support its new build
proposals at the Hartford site. She added that the College had been
successful in securing some capital monies to support a window
replacement programme in the Hartford main building.
4
8.9
The Vice-Principal added that the College was entering an extremely
difficult period and that the College would need to ensure that it delivered
savings without impacting on the quality of provision and the morale of
staff.
8.10
Discussion followed with respect to the scale of the cuts. The VicePrincipal stated that moving forward it was unclear as to what would
emerge. She added that the sector was in a state of flux and there was
uncertainty attached to the future of the funding bodies and the funding
mechanism.
8.11
Discussion followed with respect to the potential for the reductions in
funding and its ability to destabilise the College. The Vice-Principal stated
that in the knowledge that there would be a significant fall in income the
Senior Management Team were planning a course of action and exploring
a number scenarios. It was noted that the College was committed to
maintaining the quality of its provision and the morale of its staff.
8.12
Clarification was sought as to whether in its response to the funding cuts
the College would be able to deliver annual surpluses capable of funding
the capital programme. The Vice-Principal responded that there was
confidence that this was achievable. She added that the Corporation had
agreed that moving forward staffing costs should retain its current ratio
(of 69%) as a proportion of its income.
8.13
The Vice-Principal stated that some reassurance could be gained from the
level of planning taking place in response to the impending cuts.
Audit of Train to Gain Sub Contractors
8.14
The Vice-Principal reported that the College continued to have to have one
sub contract agreement in place with CEL Training Ltd. Members noted
that there had been no issues identified with this organisation and the
success rates were good.
8.15
There was confirmation that the regular auditing and spot checks had not
revealed any issues and the success rates were well above average.
8.16
The Vice-Principal went on to outline two new arrangements due to take
effect shortly, the acting as a managing agent for Holiday Break and an
franchise arrangement for the delivery of fork lift truck training with a
local company.
It was noted that these arrangements had been
considered by the Finance and General Purposes Committee.
8.17
Resolved: that:(a)
the update on the risk catalogue be received and noted; and
(b) the report on the Train to Gain audit activity be received and
noted.
9.
NEW GUIDANCE
9.1
Members noted that there was no new guidance to report.
5
10.
ANY OTHER BUSINESS
10.1
There were no further items of business.
11.
DATES OF FUTURE MEETINGS
11.1
Monday 16 May 2011
The auditors withdrew from the meeting.
12.
FINANCIAL STATEMENTS AUDITOR
12.1
The Vice-Principal: Business Management referred members to the
previously circulated report and a completed questionnaire in respect of
the performance of the External Financial Statements and Regularity
Auditors for their work in relation to the 2009-10 academic year.
12.2
It was noted there no significant issues had been identified. The VicePrincipal confirmed that a lower score had been awarded with respect to
the recommendations made and whether they were deemed to be
significant in nature. She added that there had also been some delays in
dealing with queries.
12.3
Members indicated that on the basis of their performance they would be
happy to recommend the reappointment of Baker Tilly for a further 12
month period.
12.4
Resolved: that:(a)
the performance review of the Financial Statements Auditor
be endorsed;
(b) based on the past years performance of Baker Tilly they be
recommended to the Corporation for re-appointment for a
further 12 month period; and
(c)
the performance indicators as presented be adopted for a
further year.
The meeting closed at 8.55am.
Alison Duncalf
Clerk to the Corporation
6