SECRETARIAT AUDIT AND RISK COMMITTEE (SARC)
WEDNESDAY 3 FEBRUARY 2010
ROOM 29, PARLIAMENT BUILDINGS
Members:
Alan McQuillan , Chairperson
Colm McKenna
Attendees:
Trevor Reaney, NIA
Stephen McCormick, NIAO
Brian Moreland, NIA
Richard Stewart, NIA
Edmund Kelly, NIA
Paula McClintock, NIA (agenda item 7)
Dr Gareth McGrath, NIA (agenda item 10)
David Johnston, NIA, Secretary
1. APOLOGIES
1.1 Apologies were received from Stephen Moutray MLA.
2. DECLARATIONS OF INTERESTS
2.1 No interests were declared.
3. MINUTES OF LAST MEETING
3.1 The draft minutes of the meeting held on 2 December 2009 were approved without amendment.
4. MATTERS ARISING
4.1 Paragraph 4.1
Colm McKenna advised that he had discussed the style of the original Members’ Pension report with Brian Moreland; it was acknowledged that the report had been superseded by a subsequent audit.
4.2 Paragraph 5.1
Colm McKenna reported that he had emailed a template to the Director of Resources.
4.3 Paragraph 5.2 Trevor Reaney advised SARC that Land and Property Services and commercial valuers had arrived at a view that the value of Ormiston House is now in the region of £2.5m. Alan McQuillan enquired if the valuation would have accounts implications, and Richard Stewart advised that, given reserves, that would only be the case if the value were to fall below £2m. Richard Stewart informed SARC that he was continuing to liaise with DFP on guidance relating to impairment losses in assets held.
4.4 Paragraph 8.1
Trevor Reaney informed SARC that the Assembly Commission is seeking to develop options in relation to the governance aspects of Members’ expenses and allowances, but this work has been deferred because of the current political talks. Pending approval of revised rules by the Assembly Commission, Internal Audit is moving ahead with a desk-based audit in the current financial year. The 25% sample has been selected and work is well under way. A draft report will be available in advance of the next SARC meeting.
Alan McQuillan stated that SARC would keep the audit of Members’ expenses and allowances under review. In the absence of Commission progress, a tighter audit approach may need to be signalled.
4.5 Paragraph 10.1
Trevor Reaney advised that the format of Stewardship Statements would be reviewed before the end of the current financial year.
4.6 Paragraph 11.1
Richard Stewart confirmed that he had made the necessary amendments to the Corporate Risk Register in relation to Risk 7.
4.7 Paragraph 12.1
Brian Moreland reported that a draft paper is to be discussed at the Secretariat Management Group on 26 February 2010. The main focus is to raise awareness at Head of Business / middle management level of the need to drive up operational controls and to move away from any reluctance to raise issues of concern.
5. INTERNAL AUDIT ACTIVITY / ASSURANCE 5.1 Brian Moreland informed SARC that the final report in respect of the Review of Telephony was issued on 23 December 2009. A total of 17 recommendations were made, of which 7 were allocated risk rating 1; 4 risk rating 2; and the remaining 6 were given risk rating 3. Recommendations were made in relation to contract arrangements, the allocation of mobile phones and the lodging of monies received in respect of personal calls. The assurance level for this audit was limited. SARC members discussed various aspects of the report, and it was acknowledged that the Assembly’s policy of recovery of the costs of private mobile phone calls on an actual basis would minimise any “benefit in kind” element.
5.2 Brian Moreland advised that draft reports have been issued in respect of HR Recruitment, compliance with the Data Protection Act, Payment Processing, Managing Attendance, the External Liaison Unit and the Assembly Members’ Pension Scheme. The Internal Audit of the Speaker’s Office is nearing completion and the audit of Members’ expenses is currently under way.
SARC members recommended that a number of Risk 1 ratings in the draft reports be reviewed by Internal Audit to confirm their validity in light of the overall assurance levels.
5.3 Brian Moreland reported that, following the completion of the internal investigation into the unauthorised release of information relating to Members’ expenses, a report was issued to the Clerk/Director General on 1 December 2009. As a result of subsequent correspondence, consideration is being given by the PSNI to the merits of a police investigation. SARC will be informed as soon as a decision is taken.
All material, including hard drives and cloned copies, obtained during the investigation continues to be held securely pending the above decision.
Internal Audit has noted that a number of measures, including restrictions on access to USB ports and disc drives, have already been taken to enhance control.
5.4 Brian Moreland advised that the overall level of assurance for the period remains satisfactory. This is based on the levels of assurance arising from individual Internal Audit assignments and the work under way to implement recommendations. As noted above, a number of the actions recommended as a result of the recent investigation and the Information Security review have already been implemented and this has contributed to maintaining the above assurance level.
5.5 Brian Moreland reported that the external supplier (Deloitte) has completed the assignments awarded under the first stage of the contract. The current contract allows for two additional audits to be performed, and the Head of Internal Audit is currently discussing the availability of Deloitte auditors to complete this before the end of the financial year.
5.6 Brian Moreland informed SARC that no further Freedom of Information requests have been received in relation to Internal Audit.
5.7 Brian Moreland advised that the next meeting of the Inter-Parliamentary Head of Internal Audit Group is due to be held in London on 12 February 2010. The main focus of the meeting is expected to be on audit planning, and Eddie Kelly will represent the Assembly’s Internal Audit unit.
5.8 Brian Moreland reported that consultancy support continues to be offered by Internal Audit to various business areas of the Assembly. This has included ongoing advice to the Genesis team and to HR on the options available for audit committee arrangements in respect of Members’ pensions.
Internal Audit has also been represented at the Information Management Project Board to advise on risk and control issues.
5.9 Brian Moreland informed SARC that the Internal Audit unit is now fully staffed, and Carla Campbell, Trainee Auditor, has begun formal tuition with the Institute of Internal Auditors and will be working towards achievement of the Practitioner - level qualification (PIIA).
6. OUTSTANDING AUDIT RECOMMENDATIONS 6.1 Alan McQuillan thanked Internal Audit for the production of the comprehensive report indicating progress towards the implementation of all Internal and External Audit recommendations accepted by management since the Assembly Review.
It was agreed that as the management responses to the recommendations of each new audit report, and the associated target dates, are received, these will be signed off at SARC and added to the schedule. Once actions are completed, the details will be moved to a sub-schedule for retention. Stephen McCormick advised that the “Action Taken” column should be completed and updated regularly by management. The report could then be used in the completion of stewardship statements, noting progress on actioning priority 1 recommendations.
6.2 Alan McQuillan requested that the recommendations be sorted by date and colour-coded by risk, with the format revised to reflect Exceptions (including rescheduling); Recommendations due; and Recommendations signed off. A revised schedule is to be provided for the next SARC meeting. It was agreed that ongoing reporting should be on an exception basis only. ACTION: BRIAN MORELAND
7. INTERIM RESOURCE ACCOUNTS 7.1 Richard Stewart apologised to SARC that staffing and work pressures had not made it possible to produce Interim Resource Accounts in time for the meeting but assured SARC that the NIAO deadline of 12 February 2010 would be met. Alan McQuillan acknowledged the recent Finance staffing difficulties and pressures and it was agreed that as soon as the Interim Resource Accounts are available they will be cleared by correspondence and telephone calls.
ACTION: RICHARD STEWART / PAULA McCLINTOCK
8. NAO GUIDE FOR AUDIT COMMITTEES ON THE STATEMENT OF INTERNAL CONTROL 8.1 SARC noted the contents of the NAO guide. SARC was of the view that it was currently compliant with the guide, which would serve as a useful check list in relation to the Statement of Internal Control.
9. ELECTRONIC GIFTS AND HOSPITALITY REGISTER 9.1 Given the staffing pressures already outlined, and the fact that a manual register is already in place, SARC requested the Director of Resources to propose a realistic implementation date for the electronic register, which would then be added to the schedule of outstanding audit recommendations and taken forward accordingly.
ACTION: RICHARD STEWART / BRIAN MORELAND
10. INFORMATION MANAGEMENT
10.1 Dr Gareth McGrath outlined the work of the Information Management Strategy Project Board, established by the Secretariat Management Group, on the development of a new information management strategy for the Assembly Secretariat, covering issues such as records, email, information assurance and a file plan. The strategy will contain short-term, medium-term and long-term measures for introduction over the next five years. A draft will be discussed at the SMG meeting on 12 February 2010. Dr McGrath then answered questions from SARC members on the scope of the strategy. Alan McQuillan stated that he regarded the project as a very positive development and thanked Dr McGrath for his update.
11 ASSURANCE LEVELS: PROPOSED TARGETS
11.1 As previously reported (see paragraph 4.7), a draft paper is to be discussed at the Secretariat Management Group on 26 February 2010. It was acknowledged that this was not a straightforward issue and that the findings of Internal Audit reports would always be an honest assessment of the evidence considered during in an audit. It was agreed that a focus on simplistic targets could be counter-productive; a pragmatic way ahead was needed, with the key areas for development being behavioural change, the sharing of best practice and continuous business improvement.
ACTION: BRIAN MORELAND
12 MANAGEMENT ACCOUNTS
12.1 The Management Accounts, including the projected underspend, were noted. It was also acknowledged that the general tightening of public finances is likely to impact on the Assembly Secretariat’s budget in the near future.
13 SARC APPRAISAL
13.1 Trevor Reaney informed SARC that the proposed mechanisms for SARC appraisal had been approved by the Assembly Commission on 10 December 2009 and would be implemented at the end of the 2009/10 financial year.
14 ANY OTHER BUSINESS
14.1 Trevor Reaney advised SARC that he had received a minute dated 20 January 2010 from DFP to Accounting Officers relating to the introduction of de minimis limits in the application of Gateway Reviews.
15 DATE OF NEXT MEETING
15.1 It was agreed that the Director of Resources would advise on the date for the production of the Assembly Accounts and that the next SARC meeting would be arranged to coincide with the draft Accounts becoming available.
ACTION: RICHARD STEWART / DAVID JOHNSTON |
