AUDIT COMMITTEE

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ConfirmedHIGHER EDUCATION CORPORATIONAUDIT COMMITTEEMinutes of the twenty-ninth meeting held on 12 March 2002 in the Boardroom,Queen Square House.MembersMr N Watt (Chair) Mr D HoulistonMrs L PhippsIn attendanceMs L Allen, Executive Support Officer Mr M Briggs, Contracts and Purchasing OfficerMr G Collins, Director of Finance Mr S Denton, University SecretaryMs R J Earl, UNIAC Dr G Hitchins, Deputy Vice-ChancellorMr M Hodge, PriceWaterhouseCoopers Mr G Long, UNIACProfessor L Wagner, Vice-Chancellor20 Apologies for absenceMrs V Sharma Mrs L Wharmby21 Declaration of interest21.1 Members’ attention was drawn to the requirement of Article 7.9 that ‘if aGovernor has a pecuniary, business, family or other personal interest in anymatter under discussion, that Governor shall declare such interest and shalltake no part in the consideration of the matter and shall not vote on it.’21.2 No declarations were made.22 MinutesRESOLVEDThat the minutes of the twenty-eighth meeting held on 20 November 2001 beconfirmed, subject to an amendment to the last sentence of minute 6.2 toread ‘PWC further confirmed that because the provision was within sensiblemateriality of being accurate, it was not appropriate to refer to it in theaccounts.’Aud29m.doc23 Matters arising23.1 External auditor’s management letter (minute 6.1 refers)23.1.1 The Committee noted that discussions continued between the University’sadvisors and HM Customs and Excise on the VAT position of ...

Sujets

• management
• risk management
• managers

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• Publié par: Urre
• Nombre de lectures: 10
• Langue: English

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Aud29m.doc

Confirmed

HIGHER EDUCATION CORPORATION

AUDIT COMMITTEE

Minutes of the twenty-ninth meeting held on 12 March 2002 in the Boardroom,

Queen Square House.

Members

Mr N Watt (Chair)

Mr D Houliston

Mrs L Phipps

In attendance

Ms L Allen,

Executive Support Officer

Mr M Briggs,

Contracts and Purchasing Officer

Mr G Collins,

Director of Finance

Mr S Denton,

University Secretary

Ms R J Earl,

UNIAC

Dr G Hitchins,

Deputy Vice-Chancellor

Mr M Hodge,

PriceWaterhouseCoopers

Mr G Long,

UNIAC

Professor L Wagner

, Vice-Chancellor

20

Apologies for absence

Mrs V Sharma

Mrs L Wharmby

21

Declaration of interest

21.1

Members’ attention was drawn to the requirement of Article 7.9 that ‘if a

Governor has a pecuniary, business, family or other personal interest in any

matter under discussion, that Governor shall declare such interest and shall

take no part in the consideration of the matter and shall not vote on it.’

21.2

No declarations were made.

22

Minutes

RESOLVED

That the minutes of the twenty-eighth meeting held on 20 November 2001 be

confirmed, subject to an amendment to the last sentence of minute 6.2 to

read ‘PWC further confirmed that because the provision was within sensible

materiality of being accurate, it was not appropriate to refer to it in the

accounts.’

Aud29m.doc

23

Matters arising

23.1

External auditor’s management letter

(minute 6.1 refers)

23.1.1 The Committee noted that discussions continued between the University’s

advisors and HM Customs and Excise on the VAT position of Leeds Power

and Construction Services Ltd.

23.2

Internal audit needs assessment update

(minute 11.3 refers)

23.2.1 The Committee noted that initial discussions had taken place between the

University Secretary and UNIAC to ensure that the risks identified in UNIAC’s

risk map fully correlated with the approach of the University to risk

management.

24

Risk management and update on key risks arising from the operational

plan 2001/02

24.1

The Committee received a report from the University Secretary (agenda item

5) on the progress to date in implementing the policy on management of risk.

24.2

The University Secretary reported that consideration was being given to the

incorporation of risk management into the 2000-2004 Corporate Plan. This

would be reflected in the report to the Board in March 2002; an update report

would be brought to the Committee before the revised Corporate Plan was

approved in July 2002.

24.3

The University Secretary reported that compliance with the HEFCE Accounts

Directive was one of the drivers behind the risk management strategy and

institutions had to demonstrate by 31 July 2002 that they had built risk into

their strategic planning process to enable them to demonstrate compliance

with the directive.

24.4

Further discussion with the external auditor was required to ensure that they

were satisfied with the arrangements in place by year-end to allow adequate

disclosure to be made in the annual report and financial statements.

24.5

The University Secretary further reported that he had met with Faculty

Management Teams; amongst the issues discussed was the institutional

approach to risk management. From these discussions, he was satisfied that

the majority of schools and faculties incorporated an effective approach to the

management of risk in their planning and decision making.

However, this

needed to be applied in a more systematic way, and consistently documented

for audit purposes. Accordingly, decisions were ongoing with UNIAC on how

they might be able to assist in the role out of development and awareness

raising in faculties and schools, without compromising their role in reviewing

and testing the institutional strategy.

24.6

The Committee noted the detailed analysis of the nine key risks arising from

the 2001/02 Operational Plan. Some of these risks had been recategorised

due to a movement from forecast to actual.

24.7

The Committee received and noted the report.

Aud29m.doc

25

LMU internal audit progress report, December 2001 – March 2002

25.1

The Committee received a progress report from UNIAC on the internal audit

reviews conducted, December 2001 – March 2002 (agenda item 6). These

were personnel planning – reward and recruitment, transparency review

2000/01, payroll, income accounting, Students’ Union, related companies and

SCT Banner update.

25.2

UNIAC reported that the payroll review was a follow-up to an audit carried out

several years ago. The review had noted that not all of the recommendations

made previously had been fully addressed.

UNIAC had observed that there

were a number of opportunities for the payroll process to be streamlined and

for new technology to be embraced. The Committee acknowledged the need

for action prior to the introduction of a new payroll system and noted

management plans for this. However, they were reassured that management

had recognised that this was not solely an IT systems issue, and had plans to

address this also.

25.3

UNIAC updated the Committee on the assistance they had provided to the

SCT Banner project. The Committee noted that the Academic Registrar and

colleagues in the Academic Registry had taken on management responsibility

for SCT Banner and were managing it effectively. UNIAC would continue to

be involved in the implementation of Banner and Agresso as part of the

programme

of

risk

management.

The

Committee

noted

that

the

implementation date for Banner had been revised to 1 August 2002. Agresso

would be implemented on the same date as planned.

25.4

UNIAC reported that work in progress included a project to maximise the

income generated from research grants and contracts; estates and facilities

management and continuing work on Agresso and Banner.

25.5

In conclusion, UNIAC reported that it was anticipated that the work in

progress and outstanding projects would be completed as scheduled by year-

end.

25.6

The Committee noted the report.

26

ESF activities – a new beginning

26.1

The Committee received a report from the Deputy Vice-Chancellor, Dr

Hitchins (agenda item 7) on the new management arrangements for

ESF/ERDF projects. The report also outlined steps taken to build confidence

with the Government Office (GOYH) and a new round of ESF contracts

awarded since January 2002.

26.2

Dr Hitchins reported that a meeting had taken place with GOYH

representatives on 30 November 2001. GOYH had expressed increased

confidence in the strengthened management arrangements for ESF/ERDF

projects at LMU, and GOYH had subsequently confirmed that it was willing to

consider further ESF/ERDF bids from the University. Four new ESF projects

were being co-ordinated through the Centre for Access and Lifelong Learning

(CALL) which would receive grant funding in the region of £1.5m in 2002 and

2003.

Aud29m.doc

26.3

UNIAC reported that a review of the ESF projects managed by CALL had

been completed. UNIAC felt that these projects were effectively managed,

despite a number of minor issues. However, UNIAC had carried out an initial

review of ESF projects managed by the Northern Film School, and had found

that the arrangements were not as robust. The potential liability on these

three projects was more than had been anticipated, but should be covered by

the provision in the 2000/01 accounts. UNIAC confirmed that it aimed to have

completed the fieldwork for this review by the end of the month and a meeting

scheduled with GOYH on 29 April 2002.

The Committee noted that no

adverse publicity had been generated by these projects.

26.4

The Committee noted the report.

27

Revised HEFCE Audit Code of Practice

27.1

The Committee received a report (agenda item 8) from the University

Secretary on the proposed revisions to the HEFCE Audit Code of Practice.

27.2

The University Secretary reported that a draft-revised version of the Code had

been published on the web only for consultation in December 2001. The final

published Code was expected at the end of March 2002. The revisions to the

Code reflected the new requirements on institutions arising from the HEFCE

Accounts Directive in respect of internal control and risk management.

A

more fundamental review would be undertaken in 2003/2004. Officers of the

University did not believe that the requirements of the Code would impose

any additional requirements on the University of which they were not already

aware.

27.3

The Committee noted the report.

28

Purchasing report for the year ended 31 July 2001

28.1

The Purchasing and Environment Officer presented the Purchasing Report for

the year ended 31 July 2001 (agenda item 9). He reported that last year had

been a typical year and that the University had continued to achieve high

quality and value for money in the procurement of goods and services. A

total of forty-four tender exercises had been carried out, significant savings

had been made and there were a number of examples of good practice to

note. These included environmental purchasing and the involvement of the

University in the expanding North Eastern Universities Purchasing Group.

28.2

The Purchasing and Environment Officer further reported that process costs,

as well as costs for bought-in services, had been considered last year. A new

procurement system run by HEFCE would be linked to Agresso and this was

to be introduced during the first year of operation of the new system.

28.3

The Contracts and Purchasing Officer informed the Committee that there

remained some work to be done in persuading certain individual MOC’s to

use best value goods and services.

The role of the division was to

disseminate good practice, but not to manage individual areas.

The

Committee further noted that the majority of MOC’s recognised the

professionalism of the Purchasing Division and were happy to work with it in

the interests of saving money and selecting best value.

Aud29m.doc

28.4

The Committee discussed the issues raised in the report relating to travel,

deliveries and purchase cards. The Purchasing and Environment Officer was

asked

to

consider

further

the

marketing

opportunities

arising

from

environmental initiatives.

28.5

The Committee received and noted the report, and congratulated the

purchasing team on their continuing good work.

29

Appointment of external auditor

The internal and external auditors left the meeting.

29.1

The Committee received a tabled report from the University Secretary

(agenda item 10) on the process for appointment of a new external auditor.

29.2

The University Secretary reported that PriceWaterhouseCoopers’ term of

office as external auditor was due to expire at the end of the current audit

year. The Board was therefore required to go through the process of inviting

tenders for a new external auditor, which would have to be undertaken in

accordance with the EC procurement directive. The Committee noted that

the new external auditor would be required to undertake the external audit for

the 2002/2003 year.

29.3

Members discussed the factors to be taken into account in carrying out the

appointment process, as well as the timescales involved. It was agreed to

commence the exercise in November 2002 and it was anticipated that the

timetable for the process from the commencement of the exercise to

appointment of external auditor would be three months.

29.4

The Committee agreed to establish a small panel to conduct the evaluation

process and to advise the Audit Committee and the Board. The panel would

comprise:

•

Chair of Audit Committee

•

One other Committee member

•

Director of Finance

•

Deputy Vice-Chancellor

•

University Secretary

RESOLVED

a) That the tender for the external audit should commence in November 2002;

b) That an evaluation panel be established to conduct the appointment exercise

and advise the Committee and Board accordingly.

30

Schedule of future business

30.1

The Committee received and noted a report (agenda item 11) setting out its

anticipated business for the remainder of the academic year. The Committee

noted that an outline business programme for 2002/2003 would be brought to

the final meeting of the year on 2 July 2002.

Aud29m.doc

31

Any other urgent business

31.1

The Director of Finance reported that a case of cheque fraud had been

identified during the reconciliation process.

31.2

The University bankers and the police had been contacted and in accordance

with the University’s fraud plan, a fraud management team had been set up.

UNIAC was working closely with the University and the bank to put measures

in place to avoid similar incidents in future. Their initial view was that the

University had not been negligent in any way.

31.3

A full report would be brought to the Committee in July.

32

Date of the next meeting

32.1

Tuesday 2 July 2002 at 4.00pm.

The meeting ended at 6.35pm.

Louise Allen

Secretary to the Committee

15 March 2002