Corporate Audit Committee Chair’s Report to the Principal Accounting Officer for 2008 09

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• Langue: English

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Corporate Audit Committee
Chair’s Report to the Principal Accounting
Officer for 2008/09
August 2009Corporate Audit Committee | Chair’s Report to the Principal Accounting Officer 2008/09
Contents
Page
Introduction 1
Terms of Reference 1
Corporate Audit Committee Membership 1
Relationships with other Ministry of Justice Audit Committees 2
Corporate Audit Committee activity and the main matters arising 2
Corporate Audit Committee Assurance Statement 7
Acknowledgements 7
Terms of Reference 8
Value for Money Reports 9
iiChair’s Report to the Principal Accounting Officer 2008/09 | Corporate Audit Committee
Introduction
As Chair of the Ministry of Justice’s Corporate Audit Committee, I am pleased to
present my annual report, which has been produced in line with current Treasury
guidance. The Corporate Audit Committee (the Committee) is a sub-committee of
the Ministry of Justice’s Corporate Management Board.
The Committee’s primary purpose is to provide support and advice to the Ministry of
Justice’s Principal Accounting Officer in the effective discharge of his responsibilities
for governance, risk management and internal control. The Committee acts in an
advisory capacity and has no executive responsibilities.
This report covers the Committee’s activity over the twelve-month period to July 2009.
Terms of Reference
The Committee’s Terms of Reference are shown at Annex A. The Terms of Reference
follow the guidance provided in the Treasury’s Audit Committee Handbook, which
defines the policy principles for Audit Committees in central government bodies. The
key messages from each Committee meeting are made available on the Ministry of
Justice intranet.
Corporate Audit Committee Membership
The Committee’s membership is currently composed as follows:
Anne Bulford Non-Executive member of Corporate
Management Board and Audit Committee Chair
James Turner Independent external member
Jane Tozer MBE Independent external member
James Turner (Independent External Member) completed his term of appointment
in July 2009. The Committee wishes to record its appreciation for the valuable
contributions that James has made during the course of his appointment.
Planned changes to the future membership of the Committee provide for direct
representation from the Access to Justice Group and the NOMS Agency. This will
significantly improve the Committee’s overall spread of business knowledge and its
capacity to provide robust advice and assurances to the Principal Accounting Officer
and the Board.
Regular attendees at the Committee meetings were:
Marco Pierleoni Director General, Finance & Commercial
Tracy Barker Head of Finance Accounting
Corporate Audit Committee | Chair’s Report to the Principal Accounting Officer 2008/09
Alan Rummins Head of Internal Audit
Derek Darnell Deputy Head of Internal Audit
Eddie Fitzgerald Corporate Risk and Assurance
Paul Keane National Audit Office (NAO)
Aileen Murphie National Audit Office (NAO)
Nick Bateson National Audit Office (NAO)
Relationships with other Ministry of Justice Audit Committees
Arrangements have operated to share information and matters of common interest
and applicability between the Chair of the Corporate Audit Committee and the
Chairs of other Audit Committees within the Ministry of Justice. This included a
meeting of the Chairs of the Ministry of Justice’s Audit Committees in December
2008. The meeting provided a forum to focus on matters related to the Performance
and Efficiency Programme, implementation of the International Financial Reporting
Standards, new arrangements for reporting on Information Assurance risks, the
Ministry of Justice’s Business Model, new Government Internal Auditing Standards
and changes to External Audit arrangements.
Corporate Audit Committee activity and the main matters arising
The Committee met in October 2008 and February, March and July 2009. At these
meetings, the Committee continued to exercise a robust challenge function and to
demand the highest levels of performance and accountability from those reporting to it.
Standing items reviewed at each meeting included Governance and Risk
Management, Corporate Finance, Internal Audit and National Audit Office external
audit and value for money studies. In addition, senior managers were invited to attend
meetings to assist on matters escalated to the Committee by the auditors and/or of
specific interest or relevance to the discharge of the Committee’s responsibilities. In
the period covered by this report, attendance included the Director-General NOMS,
Information Director, Head of Knowledge Management and Information Strategy and
representatives from Human Resources.
Ministry of Justice Accounts
The Committee has scrutinised and questioned management on the 2008/09
Consolidated Resource Accounts, Judicial Pensions Scheme Accounts, Court Funds
Office White Paper Accounts (Parts A and C) and the 2007/08 Official Solicitor and
Public Trustee Stewardship Accounts. As part of this process, it specifically reviewed
any disclosures made in Statements on Internal Control and any issues raised in the
external auditors’ report to those charged with governance.
2Chair’s Report to the Principal Accounting Officer 2008/09 | Corporate Audit Committee
The Committee recommended that:
• the Consolidated Resource Accounts should be signed subject to satisfactory
conclusions of the matters raised by the National Audit Office with particular
regard to NOMS, whose accounts had not been finalised at the time of the
Audit Committee on 8 July. In reviewing the Statement on Internal Control, the
Committee asked for disclosure of two additional significant control issues in
relation to criminal legal aid means testing and the quality, accuracy and reliability
of management information. These were carried forward to the final version of the
Statement on Internal Control.
• the Judicial Pension Scheme Accounts should be signed. The Committee
agreed with the auditor’s recommendation that the arrangements for the
scheme governance should be reviewed and appropriate action on the outcome
implemented before the next set of accounts are produced for 2009/0.
• the Court Funds Office Part A and C Accounts should be signed by the Accountant
General of the Supreme Court. For next year, these Accounts will transfer to the
remit of the Access to Justice Audit Committee, which will follow-up on issues
raised in the 2008/09 external and internal auditors’ reports.
2007/08 Returning Officers’ Expense Accounts
The Committee was disappointed that these accounts, covering a number of previous
UK and European elections, were again qualified in 2008; having been qualified by
the National Audit Office on an annual basis since 2002. The Committee reviewed
the 2007/08 Accounts for the Returning Officers’ Expenses, focussing on the
findings identified mid-year by internal audit and the issues leading to qualification.
The Committee noted actions that had been taken to address the failures of some
Returning Officers to submit claims. The Committee recommended that the accounts
should be signed, but is continuing to require firm assurances that appropriate and
robust action is being taken to clear outstanding Returning Officer accounts and to
avoid future accounts’ qualification.
International Financial Reporting Standards
In common with central government, the Ministry is changing the basis on which
it accounts, from UKGAAP (UK Generally Accepted Accounting Principles) to IFRS
(International Financial Reporting Standards). From 2009/0, all statutory accounts
(including 2008/09 comparative figures), budgets and estimates will be produced
on an IFRS basis. The Committee has been regularly briefed on progress to achieve
Trigger Points set by the Treasury. The Committee has noted the extensive amount of
accounting work involved in making this transition and has expressed serious concern
about the level of investment required in relation to the perceived value added by the
change. While it is recognised that IFRS must be implemented within the Treasury
time scales, the Committee welcomes the National Audit Office assurances that it
acknowledges the scale of the task and will work with the Ministry of Justice to find
pragmatic and proportionate solutions to any difficulties that surface.
Corporate Audit Committee | Chair’s Report to the Principal Accounting Officer 2008/09
Information Assurance and Data Protection
The Committee received presentations in October 2008 and March 2009 on
progress being made following the central Government Data Handling review and
on the report to be made to the Cabinet Office. The Committee also examined and
endorsed the Information Sub-Committee’s Annual Assessment of Information Risk,
in support of the Principal Accounting Officer’s Statement on Internal Control. The
Committee endorses the Ministry’s overall approach as being correct but agrees
with the Information Sub-Committee’s assessment that it is not yet fully effective in
practice. The Committee also agrees that further work is needed on specific issues
i.e. data handling by third party suppliers, personnel records, shared drives and data
use by the judiciary, and to embed principles into business