Minutes of the East Durham College Audit and Risk Committee Meeting held on 21st November 2024

R Harrison (Chair), V Bailey, D Hartis (independent member)

S. Bullock, Principal and CEO

J. Mitchelson, Vice Principal Finance and Business Planning

S. Harrison, Technical Services 

C. Leece (RSM, External Auditor)

S Pritchard (Clerk to Corporation)

S Laverick, J Smith and G Edmunds 

Private Session of Committee and Auditors prior to arrival of College Officers

RSM confirmed there was nothing that she wished to raise with the committee prior to the College Leadership Group attending the meeting.  

The chair invited the committee to disclose any interests which related to the items proposed to be discussed on the agenda. There were no interests declared

The minutes of the previous meeting of the Audit & Risk Committee held on 27 June 2024 were approved as a correct record.

Confidential 

In the absence of internal auditors, the Vice Principal Finance and Business Planning presented the report to the committee.  

The committee noted that in the opinion of WBG, the College had adequate and effective risk management control and governance processes to manage its achievement of the College’s objectives at the time of their audit work, and in their opinion, the College has proper arrangements to promote and secure value for money.

In summary there were 7 medium and 10 low priority recommendations across the audit work undertaken in 2023/24, with all audits achieving strong or substantial levels of assurance.

A member queried how the internal audit work tied in to the risk management framework.  The Principal highlighted in the next period, he was proposing that where there is a high reliance on internal controls, as identified in risk management processes, this would be tested through internal audit.

The committee noted the report and the direction of travel.

The Committee noted that at the previous committee meeting it had been agreed that 6 days would be allocated to curriculum planning in the internal audit for 2024/25 which links to a key strategic risk of the College.  The other areas of focus for 2024/25 were sickness absence management, overall financial controls, IT- web filtering and funding audit AEB.

A committee member queried if the curriculum planning audit should be staggered so auditors can see the process which would begin before the audit is due to take place. This would be noted for the future.

The committee noted the report.

It was noted that the Committee had not yet had sight of RSM’s draft report.  RSM provided a verbal update on the draft report.  In particular it was highlighted that there was still some work to conclude but that no material issues were anticipated to arise.  The audit had gone more smoothly than last year and the team was working collaboratively together.  

The Principal thanked RSM for their insight into the practices at other colleges that the College may wish to take on board and it was confirmed that any changes the College made to reflect wider practice would not require any disclosures and was unlikely to have any unintended consequences on bank covenants.  The committee asked that the Vice Principal Finance and Business Planning carefully assess any impact on covenants before undertaking any adjustments.

It was agreed that RSM’s draft report would be circulated to the committee after the meeting and that any comments committee members may have would need to be received by RSM and the Vice Principal Finance and Business Planning on or before 26 November.

The committee noted that the document remained in draft until the audit process is complete but that it was anticipated that it would be an unqualified report.  No queries were raised.

The Vice Principal Finance and Business Planning explained the context of the questionnaire.  The committee did not identify any issues for concern.

The Committee therefore agreed to recommend to the board the draft members report and financial statements and the regularity self-assessment questionnaire 2023-2024, subject to the completion of the audit and the Committee having the opportunity to review RSM’s report.

The Vice Principal Finance and Business Planning presented the report to the Committee and confirmed that there were no breaches identified during the period, there was one waiver for Industrial Cleaning for specialist services, and 3 high value orders relating to T Level Wave 5 Capital Grants and Houghall heating works, all of which were approved by the Board.  

A member queried if there was sufficient resource and capacity for addressing the changes in the procurement rules and the proposed restructuring of the team was explained.

The Principal presented the report and reminded committee members that a new format had been agreed for risk management reporting and explained the approach.  The Committee noted that the key strategic residual risk remained in any failure to implement a pay strategy which would directly impact on recruitment and retention in key specialist areas and the college’s ability to properly plan for succession.

The Committee welcomed the changes to the report and looked forward to seeing future updates and the impact of removing controlled risks off the register and gaining feedback from CMG. 

In response to queries raised it was noted that the changes to NI were not anticipated to impact on the FE sector and that a pay recommendation would be proposed to the board in December. 

With regard to a query on unqualified staff, it was clarified that some staff have qualifications from industry but are still working towards their teaching qualifications in areas such as construction, crafts, engineering and land-based courses.  This approach was to address staff recruitment issues but also presented a risk to student outcomes which was being carefully monitored.

The Committee considered and approved the updated summary of the strategic risks for the College, as determined by the CLG at their 14 October meeting, noted the controls in place at the College, the influence over the risk scores and the further proposed mitigating actions.

The committee noted the report

The Vice Principal Curriculum and Quality provided an update on subcontracting to date.

It was noted that the subcontract has been reviewed by Muckle LLP in light of the move to funding being awarded by the NE Combined Authority.

The Committee noted the report and the Principal’s prior approval of subcontracted activity for 2024/25 and approved the sub-contract for 2024/25.

S Harrison of Technical Services presented the report to the Committee.

Further information was provided on the number of devices yet to be updated, and the number of unsuccessful DDOS and similar attacks on the College.

It was proposed that the report provide an annual update on progress against the NCSC checklist to get a sense of the specifics that underly the summary provided in appendix one.

In response to a query further information was provided on the devices that need upgrades and assurance was provided that the deadline would be hit next year.

The Committee noted the report, the risks, issues and progress made with regard to Cyber Security.

Gifts and Hospitality Declaration Update and Register for Financial Year 2023-2024

The Vice Principal Finance and Business Planning presented the report which was noted by the Committee.

Confidential 

The Committee reviewed the audit tracker and noted the status of each recommendation.

The Committee was content that revised schedules have been put in place and progress will be seen in completing outstanding recommendations by the end of the year

There being no other business, the chair closed the meeting