Minutes of the East Durham College Audit Committee held on 20th January 2021

J Bromiley (Chair), T. Atkinson, M. Curry, G. Field and R. Harrison 

S. Duncan, Principal 

B. Fitzgerald, Vice-Principal Finance and Business Planning 

G. Taylor, Director of Finance 

S. Pritchard, (Clerk to the Corporation) 

V. Charlton (Secretary) 

R. Armstrong Audit-One, Internal Audit 

P. Church RSM, External Audit 

C. Leece RSM, External Audit 

Apologies were received from C. Tomlinson and W. Brown of Audit One.  P. Church of RSM was to join the meeting from 6pm owing to a prior commitment.  

Staff withdrew from the meeting to allow the auditors to raise any issues which they felt unable to discuss in their presence.   

C. Leece summarised the approach taken in conducting the external audit remotely.   

The Chair asked whether the additional work undertaken to demonstrate the College was a going concern was particular to the College or an issue across the sector and it was confirmed that all RSM's external audit college clients had gone through a more extended review process including a second partner review. 

The Chair noted that the committee would require ongoing assurance that the forecasting made by management would be likely to be met going forward.  C. Leece confirmed that the most challenging covenant for the College to meet was cash generated as a percentage of debt serviced and noted that this was also the hardest covenant to forecast. 

R. Armstrong confirmed that at this stage interactions on internal audit had been limited but that she had found management to be helpful and engaged and she had no issues to raise with the committee. 

Staff were invited back to the meeting.  

There were no conflicts of interest declared.  

AGREED 

That the minutes of the meeting held on 21st November 2019 be approved as a true record. 

It was agreed that all issues were now superseded or included in the Committee reports.  In response to a question by the Chair the Clerk advised that signing of the minutes could wait until committees resumed meetings face to face, unless there was a need to provide minutes for any external purpose.  

RSM as the internal auditor for 2019/20 presented the reports to the committee.  The reports were confidential for reasons of commercial sensitivity.  

This item was presented after item 475. 

The Reports were noted.  

The Internal Auditor presented the proposed plan for 2020/2021 and the strategic three year plan 2020 to 2023 to the Committee and highlighted the relevance of the plan to the strategic risks in the College's risk register.   

The committee noted the proposal for the use of contingency days and challenged the timing of proposed reviews according to significance and likelihood of risks and sought assurance on the expertise of the Internal Auditors to undertake aspects of the plan.   

The Chair asked the Internal Auditors to ensure previous actions were followed up and reported upon to the committee. 

The Plan and discussion was otherwise confidential for reasons of commercial sensitivity.  

The Committee approved the Strategic and Annual Internal Audit Plan 2020-2023 and recommended its adoption by the Board. 

The External Auditor presented the report and statements to the committee and confirmed the College had received an unmodified clean audit report.   

In relation to the College's going concern position, the Chair noted that the responses received from the College's bank strongly supported the position and provided assurance to the Committee and to the External Auditors.   

It was noted that there was no material concerns to bring to the attention of the Board and that other than minor non material amendments the report and statements were broadly the same as those circulated to the Board at its December meeting and that therefore the Committee could exercise its delegated authority from the Board to sign off the report and statements and confirm that the Chair and Principal were authorised to sign for and on behalf of the Board. 

It was agreed that the report and statements would nevertheless be recirculated to the board for information and to confirm the position prior to signature. 

The reports and discussion were otherwise confidential for reasons of commercial sensitivity.  

The Committee approved the report and statements under delegated authority from the Board and agreed to recirculate the final form report and statements to the Board prior to signature. 

The Vice Principal Finance and Business Planning presented the report which summarised the work of the Audit Committee. 

At paragraph 2.4.3 of the report, the Chair requested that more emphasis be placed on the role played by the Committee in challenging management on going concern and the financial statements and that the Committee had obtained the required assurance from management in this regard.    

The Vice Principal Finance and Business Planning informed the Committee that the return submission was due in one week.   

The report was noted and approved subject to the amendment to paragraph 2.4.3 and was to be circulated amongst Board members prior to the submission of the financial report and statements. 

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 

The Vice Principal Finance and Business Planning presented the report.  The report was confidential for reasons of commercial sensitivity.  

The Report and sub contract were accepted and recommended to the Board for approval.  

The Vice Principal Finance and Business Planning presented the report.   The report was confidential for reasons of commercial sensitivity 

The Report was noted. 

Next meeting was scheduled to be held in March, however this date may need to be changed to ensure it fits in with field work and turning around the reports by Auditors.  

There were no other items of business to discuss.