Present:
J Bromiley (Chair), M. Curry, S Duncan, G. Field and R. Harrison
In Attendance:
S Judson, Vice-Principal Finance and Business Planning
C. Tomlinson, Vice Principal Curriculum and Performance
G. Taylor, Director of Finance
S. Pritchard, (Clerk to the Corporation)
V. Charlton (minutes)
W Brown Audit-One, Internal Audit
C. Leece RSM, External Audit
Apologises for Absence:
No apologies
489 Private Session of Committee and Auditors
Staff withdrew from the meeting to allow the auditors to raise any issues which they felt unable to discuss in their presence.
Points raised to be discussed under agenda items
Staff were invited back to the meeting.
490 Conflicts of Interest
There were no conflicts of interest declared.
491 Minutes of meeting of April 2021
The Committee noted and approved the minutes of the held in April 2021 subject to amendments.
Changes requested to minutes to confirm that Subcontracting was presented by the Vice Principal Curriculum and Performance and that it was the AoC who were publishing the revised management accounts, not the FE.
492 Matters Arising
There were no significant matters arising to discuss.
493 Internal Audit Reports Financial Assumptions
Audit One as the internal auditor for 2020/21 presented the reports to the committee. The reports were confidential for reasons of commercial sensitivity.
The Committee noted the reports.
494 External Audit Post 16 Audit Code of Practice
The External Auditor (RSM) provided a verbal update which was confidential.
The report was noted.
495 Risk Management Update
The Principal presented an update on risk management and the Risk Register was presented to the Committee. The update and register are confidential for reasons of commercial sensitivity.
AGREED The updated Risk Register was noted and recommended to the Board
496 Sub-Contract Arrangements
The Vice Principal Curriculum and Performance presented the report. The report was confidential for reasons of commercial sensitivity.
The Committee noted the report.
497 Finance Audit Plan
The Vice Principal Finance and Business Planning presented the Audit Plan. The report was confidential for reasons of commercial sensitivity.
The Committee noted the report.
498 April Management Accounts – Draft for discussion
The Vice Principal Finance and Business Planning presented the Management Accounts. The report was confidential for reasons of commercial sensitivity.
The Committee noted the report.
499 Audit Tracking Report
The Vice Principal Finance and Business Planning presented the Audit Plan. The report was confidential for reasons of commercial sensitivity.
The Committee noted the report.
500 Any Other Business
C Leece and S Wilson (RSM) presented the external audit plan (circulated separately to papers) which had been prepared following an initial meeting with the Vice Principal Finance and Business Planning and the Finance Director. Key risks were highlighted to members of the Committee.
Income recognition - A review of client student data is due to take place which will include in-year COVID specific funding received by the college and standard testing on income streams. ESFA announced that they will also be doing a review on sample basis of income and the colleges would be informed by letter if selected. Key findings would be reported to committee.
The Pension Scheme liability will be reviewed from the actuary, the disclosures, and any assumptions used in arriving at that liability at year end.
An extensive review of Going Concern would be undertaken, looking at sensitivities, cash balances and bank covenants, ensuring they are forecasting compliance for the 12-month period from the anticipated signing date.
There was previous discussion with Bank Managers, regarding the 5-year repayment on the agreement of the mortgage which will come up for re-negotiation in September 2022. Technically, within that 12-month period there is a re-negotiation and it was quite early to have that complete by December 2021 ahead of September 2022, there has been a discussion with the bank around whether they will be renewing, and from an audit perspective, they are looking at material uncertainty. CL thought it important to confirm the bank had had the latest financial information available and that the bank had responded to advise that on that basis they did not have any issues in supporting the college going forward. It was important to have words from the bank ahead of audit committee as the committee also needed to see them to form the committee view, and before board sign off there needs to a further correspondence from the bank so we have it right up until the latest time possible. In terms of what board needs to do to inform their view CL recommended going back to the Emerging Issues document (table). It was assumed the Vice Principal Finance and Business Planning would prepare a paper in terms of the Going Concern assessment and the paper would contain headings where Governors should be concentrating their time.
CL advised that the Vice Principal Finance and Business Planning and the Finance Director had created a 5-year model which triangulates everything, so the College is now in a much clearer position and the intention is to use that piece of work as the basis for the Going Concern Paper around sensitivities.