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Audit Committee Wednesday, 20 May 2009
pension rules had changed as there could be a potential liability if this was not the case.
The Director of Finance agreed to report back to the Committee on this.
VAT (Partial Exemption Methodology and Capital Goods Scheme Liability)
Consideration would be given to the University’s VAT arrangements and calculations
to ensure they are appropriately accounted for within the financial statements.
Accounting for Research Balances
Research and development balances will be reviewed to ensure they are appropriately
recognised within the financial statements.
Accounting for Fixed Assets
The audit would cover the proper identification and disclosure of fixed asset acquisition
and disposals. The review would consider whether the carrying value of fixed assets
was appropriate in the current economic environment.
The Committee approved the External Auditor’s proposed approach to the audit of the
University's Accounts as set out in their report.
AUDIT/2008/35 Internal Audit Update
Internal Audit informed the Committee that the Audit Plan was 70% complete and
provided a summary of the results of work carried out in the following areas:
Commercial Pricing; Pension Scheme Administration; Corporate Communications;
Performance and Development Review Processes; Sports and Recreation Services;
Student Services Relocation. The key points noted were as follows:
Commercial Pricing
It was found that while there was an adequate commercial pricing policy in place, there
were inconsistent processes and pricing structures across the various University
departments potentially resulting in missed opportunities. The findings relating to the
Veterinary Faculty had been discussed at the February 2009 meeting and action was
being taken to address current weaknesses through a new staff appointment.
Pension Scheme Administration
A review of the systems and controls over the administration of the various pension
schemes reported no recommendations for improvement.
Corporate Communications
The main control point was that there was a high level of user upload access to the
University’s website. Justification should be obtained to ensure this level of access was
required. The Committee noted that this situation arose in part because of the need to
allow academic experts to update material on their areas of specialist knowledge.
Performance and Development Review Processes
The audit identified that there was no direct link between Performance and
Development Review and pay/incentivisation which Internal Audit stated was
characteristic of the sector. The Committee agreed that there was a need to strengthen
this link.
Sports and Recreation Services
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A number of recommendations were made to improve the controls of cash collection
and end of day reconciliations.
Student Services Relocation
Internal Audit confirmed that the relocation had been efficient and the focus of further
review would be on efficiencies and service improvements expected as a result of the
restructure of services.
IT Resource and Management
The Committee noted that this was work in progress and asked for clarification on
whether it would be beneficial to change the current structure of IT support, in
particular the deployment of resources between IT Services and academic departments.
The Committee expects to consider the final report at its next meeting.
Other
The Committee noted that current activity included a Whistleblowing Investigation,
Carbon Reduction Commitment, PAYE Workshop, IT Security Workshop and Finance
Office Administrative Review.
The Committee agreed to a modification to the Audit Plan to defer two projects until
next year – External Partnerships and the development of a Financial Controls
Framework. These would be replaced by a review of Research Management.
It was suggested that future reports should included an indication of Management's
response to Internal Audit recommendations, including timetables for action and any
areas of disagreement.
AUDIT/2008/36 Implementation of Outstanding Priority 1 and 2 Recommendations
The Committee was updated on the degree of implementation of the audit
recommendations.
Finance Office
The Group Financial Controller reported that 95 action points had been dealt with in
total and that 41 required to be progressed including 10 priority 1 points. The
following was highlighted:
Debt Management
Debt management was being centralised and this would be progressed further with
the introduction of the Student Lifecycle Project. Web payments were being
introduced by the Accommodation Service.
Sales Invoicing
Sales invoicing was being rolled out across the University.
Cash Collection
The number of collection points would be reduced and this would be progressed by
the introduction of the Student Lifecycle Project.
Ledger Restructure and Maintenance
A focus was being placed on restructuring the ledger and then work would be
progressed to improve the balance sheet monthly reconciliation process.
Ledger Journal Access
This would be progressed after the ledger restructure had been implemented.
Purchase to Pay
The purchase to pay interfaces for catering and estates should be implemented in
the following year.
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Audit Committee Wednesday, 20 May 2009
The Committee queried the timing of the implementation of the recommendations and
noted that in many instances this was reliant on the progress of the Student Lifecycle
Project.
Departments other than the Finance Office
The Secretary of Court reported that with regard to 2006/07 audits there had been 104
recommendations and 22 remained outstanding. The following was noted:
Campus Security As a result of the Campus Security Audit a Working Group had been set up which
focused on improving electronic access and CCTV systems. A review of the
current monitoring electronic systems had resulted in a report highlighting the risks
for each University building. Requirements had been prioritised and an annual
programme of improvements would be implemented.
IT A great deal of work had been done to improve the procedures regarding disaster
recovery, to tighten network management and security and to comply with software
licensing requirements. The capacity of the central back-up and restore facility had
been substantially increased and several departments that had hitherto operated
their own disaster recovery systems had now transferred to the central facility. A
software package had been obtained that audits software held on personal
computers, identifying any software for which licences are not held. This tool is
being used for all centrally-managed PCs, but does not yet operate University-
wide. The Committee noted that, while much had been achieved in the last year,
more remained to be done; a particular concern noted was that approximately 30%
of staff used email systems other than the one provided centrally: the reasons for
this would need to be determined.
There were 42 recommendations in 2007/08 with 11 still to be implemented. The main
points to note were the requirement for a single system to collect and approve
postgraduate research applications and the need for improved market analysis, an issue
that would be addressed through a proposed new appointment. The new HR/Payroll
System would include a model to capture and manage training requirements and
performance and development reviews.
17 of the 32 2008/09 recommendations had still to be addressed including
establishment of a central project management office which was under consideration
and completion of monthly absence returns online which would be implemented as part
of the new HR/Payroll System.
The Committee thanked the Secretary of Court and Group Financial Controller for
their reports and requested that future reports include a note clarifying the timescale for
implementation.
AUDIT/2008/37 Audit Committee Self-Assessment Evaluation
Since its last regular meeting the members of the Audit Committee had met to discuss
their requirements in order to perform their role more effectively. The Committee
noted the report.
AUDIT/2008/38 Risk Management
The Committee noted the paper reporting the 13 top rated risks to the University and
the additional information on their current status. The Committee was informed that
the risks surrounding budgets and income delivery were the subject of consideration as
part of the recent budget setting process the outcome of which would be reported to
Court in June. It was agreed that the Principal should request that the Deans take
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Audit Committee Wednesday, 20 May 2009
responsibility for implementing the Risk Management Policy and that senior managers
should be required to provide Statements to the Principal stating whether risks had
been assessed, procedures were in place and action had been taken to address the risks.
The Director of Finance undertook to provide additional information explaining the
ratings.
AUDIT/2008/39 Proposed Change to Accounting Policy on Capitalisation of Equipment
and Software
To ensure that the Committee were able to review a change to policy before the year
end process for 2008/09, this item was being presented to Audit Committee prior to
approval by Finance Committee. The Committee noted that the proposed change
enabled a reduction in the current administrative burden in dealing with capitalisation
of assets and that there would be no significant impact on the Income and Expenditure
Statement. The Committee did not raise any concerns at this stage.
AUDIT/2008/40 Guide for Members of Higher Education Governing Bodies in the UK
At the suggestion of the Audit Committee Convener, Court had agreed that Audit
Committee take forward a comparison of current governance practice with the
Committee of University Chairs Code of Practice. It was agreed that Internal Audit
should undertake a similar exercise to that taken for the audit code.
AUDIT/2008/41 Any Other Business
41.1 Update
The Group Financial Controller informed the Committee that a Financial Reporting
Standard (FRS) was due to be issued on Heritable Assets. The Finance Directors
Group was considering the conversion of International Financial Reporting Standards
(IFRS) with UK General Accounting Principals (GAAP) which would potentially
impact in 2012 and consideration was being given to standardising FRS 17 assumptions
across the Sector.
41.2
Internal and External Audit Contracts
The Committee noted that the Internal and External Audit contracts were due to end in
2009, though both had options to extend, and agreed that this should be taken forward
outwith the regular meeting.
41.3
Value for Money
The Committee asked whether the University had procedures in place for ensuring
value. Internal Audit informed the Committee that Value for Money (VFM) tended to
be included as part of each review and would not normally give rise to a separate
report. Internal Audit undertook to consider the issue of Value for Money audits and
would advise the Committee on how it could be satisfied that this was being addressed.
41.4 Farewell
The Committee noted that this was the last Audit Committee meeting to be attended by
the Principal, who was retiring from the University. The Convener thanked him for his
commitment and support of the Committee and wished him all the best for the future.
AUDIT/2008/42 Date of Next Meeting
Thursday, 1 October 2009
Prepared by: Paula Vinaccia, Clerk to Committee, [email address]
Last modified on: Thursday, 1 October 2009
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