Audit & Compliance Committee

Audit & Compliance Committee
Minutes of the meeting of the Audit & Compliance Committee
held on 24 May 2007
Present:
Alan Gibbins [Chair] David Thomas Prof Graham Thompson
In attendance:
Dean Curtis Richard Evans [Deloittes] Andrew Keeble
Alex Martin [KPMG] Nicola May [KPMG] Diana Mulebwaire
[Deloittes]
Prof Philip Ogden Trevor Pearce Charles Perrin
Apologies for absence:
Wendy Appleby Prof Roger Corder Marianne Fallon
Part 1 – Preliminary items
Membership [Paper ACC 2006/29]
2006.77 The Committee received the provisional membership for 2007/8 and
noted the following points:
(i) that Professor Graham Thompson’s continuing membership was
subject to his re-election as Dean, while Professor Roger Corder’s term of
office would conclude at the end of the academic year;
(ii) that Trevor Pearce would be leaving the College shortly and a new
Secretary to the Committee would be appointed.
2006.78 The Committee resolved to thank Professor Corder, Professor Thompson
and Trevor Pearce for all of their work on the Committee’s behalf.
Minutes [Paper ACC 2006/30a, ACC 2006/30b, ACC 2006/30c]
2006.79 The Committee received and confirmed the minutes of the meeting of 7
March 2007 with the following amendments:
2006.56 (i) to recommend to Council the re-appointment of Deloittes as
internal auditors for 2007/8
2005.56 (ii) to recommend that a market testing exercise be conducted, in
line with the procedures outlined in paper ACC 2006/21, for the
appointment of external auditors for 2007/8
2 Unconfirmed

Matters arising [Paper ACC 2006/31]
2006.80 The Committee received the paper detailing matters arising from the
minutes of 7 March 2007 not mentioned elsewhere on the agenda and
noted the following points:
(i) that the Estates Department had been set the objective of finalising its
risk register by the end of the Academic Year; the Estates risk register
would be an item on the agenda for the November meeting of the
Committee.
Action: Trevor Pearce
(ii) that the College were continuing to develop plans to enter into a
purchasing consortium with King’s College.
Part 2 – Matters for discussion
Appointment of external auditors
2006.81 The Director of Finance & Planning reported that it had been advised
that, in order to avoid a breach of EU purchasing directives, the
appointment of external auditors would need to go through a full tender
exercise.
2006.82 The Committee noted the following points:
(i) that the College should ensure that similar procedures were followed
for the appointment of its fund managers;
(ii) that anecdotal evidence suggested that other Universities had not
followed the full tender route for the appointment of external auditors;
(iii) that external auditors were appointed on an annual basis, with a
market exercise required after seven years; there should be no implication
of a seven year contract for the College’s external auditors.
2006.83 The Committee resolved that the appointment of external auditors should
be conducted through a full tender exercise.
Staff Policy (Papers ACC 2006/37a, ACC 2006/37b)
i. Compliance
2006.84 The Committee received and noted a compliance report on Employment
Law.
2006.85 The Chair of the Staff Policy Committee reported that, in order to
increase compliance with equal opportunities legislation, it was now a
requirement that all Staff Policy Committee papers included an equality
impact assessment.
3 Unconfirmed

2006.86 The Head of Employee Relations reported that the Department of Human
Resources employed a variety of methods to ensure that they were aware
of new employment law legislation including subscription to relevant
professional journals; subscription to an employment law website and
legal helpline; contracts with employment law firms; receipt of
employment law bulletins; participation in email learning forums on
employment law; receipt of monthly law digests. These methods included
both analysis of new legislation and its interpretation via case law.
2006.87 The Committee noted the following points:
ii. Risk Register
(i) that listing all historic employment law would be burdensome. More
recent law and legal cases, which are the focus of this paper, validate (or
otherwise) the College’s compliance with the main body of law and this is
considered the best way to satisfy the College and the Audit &
Compliance Committee that employment law is being adhered to;
(ii) that not all legislation was enforced; in some instances ensuring full
compliance with legislation, where this legislation was not enforced, would
incur considerable expense for the College;
(iii) that the Compliance Template should be amended to ensure that the
Committee received more information on the process by which legislation
is received and analysed and less detailed information on the relevant
legislation itself;
(iv) that the Staff Policy Committee received an annual report on
employment law developments , which enabled the Committee to analyse
its compliance with the relevant employment legislation;
(v) that the Staff Policy Committee also received an annual report on
grievance and disciplinary cases, which enabled the Staff Policy
Committee to consider whether instances had occurred in which the
operation of the employment framework was not compliant with
employment legislation;
(vi) that future compliance reports should include details of the questions
being asked to aid the Committee’s analysis.
2006.88 The Committee received and noted the Staff Policy Committee’s risk
register.
2006.89 The Chair of the Staff Policy Committee reported that the Staff Policy risk
register had been re-formatted, in line with the format agreed at the Audit
& Compliance Committee, to include an assessment of the impact cost of
each risk; it was felt that it might be more useful to have in addition an
assessment of the likelihood of each risk occurring and that the risks
should be shown in order of magnitude/likelihood
2006.90 The Committee noted the following points:
(i) that the impact cost of risks on the register should normally be in
bands, in order for more effective comparison of risk to take place;
4 Unconfirmed

(ii) that the Staff Policy Committee oversaw other areas of risk and
compliance, notably relating to the recruitment and retention of staff.
Related risks included reputational loss from poor performance in the
RAE and risk relating to the National Pay Framework and Job Evaluation.
Internal audits undertaken of the Staff Policy Committee risk register
suggested that the Committee were aware of risks and were taking
appropriate measures to mitigate them;
(iii) that the College employed 42% of its staff on fixed-term contracts; the
Human Resources department deployed a comparatively large amount of
resource on managing the risks presented by terminating the employment
of staff on these contracts;
(iv) that the College would be entering into a project undertaken by the
University of Portsmouth with a view to benchmarking its performance on
staff grievance and disciplinary issues;
2006.91 The Committee resolved to report to Council and the Staff Policy
Committee that, in its opinion, the College currently operated appropriate
processes to ensure, as far as possible, compliance with employment law
and to ensure effective management of risk in relation to staff policy.
Whistleblowing [Paper ACC 2006/42]
The Secretary to the Committee declared an interest in the item, as advisor to
the subject of a Grievance case emanating from one of the Whistleblowing
cases described in the Report.
2006.92 The Committee received and noted a report on two Whistleblowing
cases undertaken by the College.
2006.93 The Head of Employee Relations reported the following points:
(i) that the College Whistleblowing Policy required all reports from
Whistleblowing cases to be reported to the College; the reports from
these two cases had been delayed due an oversight of this requirement of
the Policy;
(ii) that the report on the case of the Department of Economics expressed
some support for the complaint; the report concluded that there had been
conduct that was “inadvisable” rather than “inappropriate”;
(iii) that the closure of the Open & Distance Learning Unit was currently
being reviewed by the internal auditors; the complainant in the
whistleblowing case had declined to pursue the case with the auditors,
who would not be investigating the case further;
5 Unconfirmed

(iv) that the Whistleblowing Policy was more appropriate to cases of
alleged financial impropriety rather than alleged academic misconduct.
The Secretary to Council should review the Policy with a view to
considering whether cases of alleged academic misconduct should be
referred to Academic Board rather than the Audit & Compliance
Committee.
Action: Wendy Appleby
External Audit Plan 2006/7 [Paper ACC 2006/32]
2006.94 The Committee received and noted the external audit plan 2006/7.
2006.95 The Committee noted the following points:
(i) that the charge for work undertaken by the external auditors in relation
to VAT and climate change levy savings was in line with the relevant
ethical guidelines;
(ii) that the external auditors would review the College’s expenditure in
relation to US bioscience companies as part of the audit on estates and
capital developments;
(iii) that the audit would be completed by 30 November 2007, in order for
the College to be able to meet HEFCE deadlines for the submission of
audited accounts.
External audit; benchmarking data [Paper ACC 2006/33]
2006.96 The Committee received and noted a report on benchmarking data from
the external auditors.
2006.97 The external auditor reported that this was one of two benchmarking
reports compiled by the auditors; the College had opted not to take part in
the other audit, relating to international students.
2006.98 The Committee noted that the performance by the College on pensions
liabilities was an exception in the sector.
Internal audit progress report [Paper ACC 2006/34]
2006.99 The Committee received and noted a progress report from the internal
auditors.
2006.100 The internal auditor reported that the audit on debtors had assigned a
rating of limited assurance; there had previously been a rating of
substantial assurance in this area, but previous recommendations had not
been implemented. Some of these recommendations had since been
implemented following the assignment of the limited rating.
2006.101 The Committee noted the following points:
(i) the College had debts of approximately £2 million that were 120 days
old or older; much of this was from the Student Loan Company;
6 Unconfirmed

(ii) that the AGRESSO system now enabled automatic chasing letters to
be produced; it was expected that this would enable more rigorous
chasing of debtors and would enable several outstanding
recommendations to be implemented.
Internal audit strategy 2007/8 [Paper ACC 2006/36]
2006.102 The Committee received the proposed internal audit strategy for 2007/8.
2006.103 The internal auditor reported that the strategy included minor
amendments to the strategy that the Committee had reviewed in detail in
July 2006. The audit would cover areas identified in the College risk
register and Strategic Plan, as well as previously identified areas such as
the Students’ Union and value-for-money.
2006.104 The Committee resolved to approve the internal audit strategy for 2007/8.
Part 3 – Matters for report
Recommendations log [Paper ACC 2006/41]
2006.105 The Committee received and noted the Recommendations Log.
2006.106 The internal auditor reported the following issues;
(i) that the Log was intended to replace the previously issued end of year
follow up report;
(ii) that Priority 1 recommendations were followed up by the auditors on a
continuous basis;
(iii) that recommendations would be removed from the register once their
implementation had been reported to the Committee.
2006.107 The Committee noted the following points:
(i) that the Conferences, Catering and Residential Services unit would be
reviewed during 2007/8;
(ii) that the Log should in future indicate changes to the Log previously
submitted to the Committee, with the date of implementation of any
recommendations recorded on the Log for the Committee’s information.
Audit Requirements for 2007/8
2006.108 The Director of Finance & Planning reported that the Committee had
previously resolved to have an item on the agenda of the final meeting of
the year relating to audit requirements for the following year; however it
was felt that there was substantial overlap with the review of audit
performance item, on the agenda for the Spring meeting of the Committee
on an annual basis.
7 Unconfirmed

2006.109 The Committee resolved that an annual review of audit requirements for
the following year was not necessary, given the annual review of audit
performance undertaken by the Committee.
Fraud
See confidential minute ACC 2006.110
Risk management [Paper ACC 2006/40]
2006.111 The Committee received and noted a report on risk management within
the College. A full report would be submitted to the November meeting of
the Committee.
HEFCE Annual Risk Assessment [Paper ACC 2006/43]
2006.112 The Committee received and noted the annual HEFCE Annual Risk
Assessment letter, which indicated that HEFCE considered that the
institution was “not at risk”.
Date of next meeting
2006.113 The Committee noted that the next meeting of the Committee would take
place on 5 November 2007.
Trevor Pearce
t: 020 7882 5589
e: t.pearce@qmul.ac.uk
www: council.qmul.ac.uk
8 Unconfirmed