Corporate report

Audit and Risk Assurance Committee minutes: 22 January 2020

Updated 23 October 2023

Applies to England

Present

John Hughes, Chair

Kathryn August, Board member

Martin Spencer, Board member

Venessa Willms, Board member

Helen Jesson, Co-opted member

Also in attendance

Amanda Spielman, Her Majesty’s Chief Inspector (HMCI), Accounting Officer

Matthew Coffey, Chief Operating Officer

Louise Grainger, Director, Finance, Planning and Commercial

Colin Wilcox, NAO

Karen Murray, Mazars

Carol Hartley Burdett, GIAA

Ivan Cheary, GIAA

Matthew Terry, Corporate Governance Manager

Emily Williams, Deputy Director, Strategy, Governance and Private Office – Item 11

Karen Shepperson, Director, People and Operations - Item 13

Sarah Newberry, Head of HR Policy and Employee Relations - Item 13

Apologies

Apologies were received from James Aston (co-opted member).

Status

Approved

1. Chairman’s introduction, declarations of interest, minutes, actions and matters arising

Martin Spencer was welcomed to his first Committee meeting. He sits on the board of several public bodies, including the Serious Fraud Office and the Education and Skills Funding Agency.

The minutes of the previous meeting were approved without amendment.

2. Report from Chair and Members

The Chair noted his attendance at both the GIAA’s risk event for audit chairs, and the DfE’s ALB meeting for ARAC chairs.

The Committee noted the successful launch of the annual report for 2018/19.

3. Progress against audit recommendations

The Committee noted the progress made against audit recommendations.

4. Internal audit progress report

The Committee noted that of the five remaining audits to be delivered during 2019-20, three will be brought to the Committee’s March 2020 meeting. The remaining two will be brought to the Committee’s meeting in June.

GIAA sought feedback from the Committee on the internal audit plan 202021. The draft plan will be amended in the light of this discussion and others with stakeholders. The plan will return to the Committee for further discussion and sign off by HMCI in March.

5. Internal audit reports

GIAA presented the report on Travel and Subsistence, providing assurance that Ofsted has suitable and effective controls in place for travel and subsistence claims and the use of Ofsted charge cards. Only three low risk recommendations were made.

GIAA also presented their report on Early Years Inspections following the transfer of responsibility for their delivery to Regional Directors. The Committee noted the two low and one advisory recommendations made.

The Committee noted GIAA’s review of General Controls and Change Management for several key systems. The Committee reviewed the two moderate recommendations arising from the audit and noted that they had been accepted by the Executive team.

The core financial controls audit focused on the General Ledger. Two low risk recommendations had been made and accepted. The Committee noted that an audit providing similar assurance for HR will be incorporated into the 2020-21 Internal Audit plan.

6. External audit update

The Committee received an update on NAO’s value for money audit activity and noted that Ofsted had been, and would continue to be, consulted on any value for money work the NAO undertake which falls within our scope.

7. NAO audit planning report

The NAO audit planning report had been sent to the Committee before the meeting and amended in the light of Committee members comments.

The Committee noted the revised report and agreed the proposed approach.

8. IFRS 16

The Committee noted an update on the requirements of International Financial Reporting Standard 17 for Leases. The revised standard comes into effect from 2020-21.

9. Interim Governance Statement

The Committee reviewed the Interim Governance Statement, noting that a duplicate interest had been recorded in the table of Board members’ interests.

Subject to two small formatting changes, the Committee was content with the statement.

10. Counter fraud, bribery and corruption

A summary of the fraud, bribery and corruption risks, the Counter Fraud, Bribery and Corruption Strategy and Policy agreed by HMCI and an update on Ofsted’s compliance with the Government counter fraud standard, were presented to the Committee.

NAO and GIAA confirmed that the arrangements in place were comprehensive. The Committee were supportive of the documentation and satisfied that it met the counter fraud standard.

11. Strategic Risk Register

The Committee noted that the external uncertainty risk has been closed following the outcome of the General Election, and the UK’s scheduled departure from the EU.

The Committee queried whether cyber and data security should be a separate strategic risk. This will be considered during the strategic risk discussion at the Board’s spring away day.

The Committee agreed that the residual risk around failing to deliver our funded inspection programmes should continue to be considered as medium probability, given the impact that staff sickness, poor weather or other external factors out of our control could have.

12. Finance report

The Committee noted the financial position at the end of period 8.

13. Whistleblowing policy

The Committee reviewed the draft revised whistleblowing policy. It was suggested that anonymised whistleblowing case studies, or Whistleblowing champions might be helpful in giving staff confidence.

It was agreed that the section of the policy addressing malicious whistleblowing should be softened, so that it still deals with the issue appropriately, but does not risk deterring people from coming forward.

Paragraph 4.2 of the policy states that an individual should raise a concern if they are asked to do something that they consider to be “fundamentally wrong”. The Committee noted that “fundamentally wrong” was open to interpretation and should be defined as clearly as possible.

14. Audit and Risk Assurance Committee Effectiveness

The Chair and Committee endorsed the proposal to review the effectiveness of the Committee in February 2021.

15. Committee membership

The Committee and Executive thanked the Chair for his service in chairing the Committee during the last two years. Martin Spencer succeeds John Hughes as Chair. John will attend his final meeting in March.

The Committee and Executive also thanked Helen Jesson for her service as a co-opted Committee member, noting the end of her two-year appointment.

James Aston will continue to sit on the Committee, having been reappointed to serve a further two years until February 2022.

16. AOB

No further business

End of meeting

The next Audit and Risk Assurance Committee meeting will take place at 10.30am on Wednesday 17 March 2020.