Audit Committee minutes: 20 March 2018

Dean Parker, Sue Bruce, Damian Brewitt, Graeme Clarke and Emma Hartley.

None.

Agreed: That the minutes of the Audit Committee of 17 October 2017 be approved as a correct record of the previous meeting, and the Chair be authorised to sign them.

isk register, which focused on risks associated with Brexit. CW advised it is currently unclear as to when the European Union (Withdrawal) Bill would receive Royal Assent from Parliament, which impacts on our planning for the European Parliamentary Elections, which are currently scheduled for 2019. Although unlikely to go ahead in the UK, it is important that the Commission fulfils its statutory duties in preparation for the event until we are aware that these duties have been discharged.

CB advised that resources for the European Parliamentary Elections have been ring-fenced in the 2018-19 budget, and can be returned to the Speaker’s Committee if the poll does not take place.

CW noted the relevant strategies in place for mitigating this risk, and highlighted our involvement and contribution to the Cabinet Office EU Exit project team, which
we will continue to attend and work with. We are also working with the Association of
Electoral Administrators (AEA) and will continue to use the ECAB meetings to update
and inform electoral administrators on progress.
Noted.

RMJ introduced the report and highlighted the materiality threshold remained at 2% for overall account materiality. The audit fee has been set at £41,000 to reflect the additional work on EU Referendum claims. RMJ advised she was not aware of any instances of fraud, and members confirmed that they too were not aware of any instances of fraud.

Agreed: That the report be received and noted. 

RMJ introduced the item and advised that the interim audit has been completed, aside from some outstanding technical queries which are in progress. No material issues of concern had been identified. Testing of EU Referendum claims will take place in April prior to the final audit in May. The Finance team was thanked by the NAO for a successful audit visit.

In response to a question on materiality, RMJ advised that the threshold is different for Policy Development Grants, due to the nature of the Grants and associated risks. 

Noted.

RMJ introduced the study, explaining the short guide format was similar to those used by government departments. Due to legislative requirements, the NAO were required to undertake a value for money study in the first year of a new Parliament, and the short guide fulfilled this requirement. The guide has been sent to the Speaker’s Committee for members to consider ahead of the Speaker’s Committee meeting with the Commission on 23 March 2018.

There was discussion about the difference between some of the Commission’s annual Employee Engagement Survey results and that of the Civil Service’s People Survey. CB pointed out that a like-for-like comparison of the results is not accurate as the questions contained in each survey are different. The relatively small size of the Commission meant that if only a handful of employees changed their minds, it can have a disproportionate effect on the statistics. RMJ acknowledged that Commission survey questions were different to those asked in the Civil Service survey.

Agreed: That the study be noted, and that the NAO contact the Speaker’s Committee regarding the comparability of survey statistics.

GS introduced the report, noting that only the follow-up audit remained outstanding and would be tabled at the June Board meeting.

Noted.

Corporate Governance Report (ECAC 06/18)

LN introduced the report, highlighting recommendations on a schedule of policies and the board effectiveness review process for the Commission. The Board welcomed the recommendations. CB noted that development of a tracker will be part of a wider review of the processes for tracking and updating policies.

Agreed: That the report be noted, and for a tracker to be set up to update the Governance policies on a regular basis. 

Electoral Registration

LN introduced the report, highlighting recommendations on a Stakeholder Management Framework and a timetable for publishing performance standards for the Commission.

There was a discussion around the content of the stakeholder management framework, and AI advised that it would include information on the key messages we wanted to share with stakeholders, identify key engagement points and support us in being joined up across the organisation.

In response to a question regarding 4.2 of the report, AI advised that the ERO performance report had not been made available due to a delay caused by the UKPGE in June 2017, and our preference is not to publish this data during the election period.

The challenge of revising guidance documentation in a user friendly manner, in light of the complexity of electoral law, was noted.

CB reported that at the recent PACAC meeting, the Committee had requested information on the risk assessment, and we had shared an overview of the assessments.

Noted.

Campaigns

Following a brief introduction by LN, CW welcomed the recommendations and commented that the updates required to the Campaigns Framework are in progress.

In response to a comment regarding updating the lessons learnt log, CW advised they are putting this into practice and adding lessons learnt as campaign work progresses.

In relation to the procurement deviation, KR noted that going forward, the procurement team will ensure any exceptions are carefully documented.

Noted.

Electoral Claims Unit

to the Commission by the Electoral Claims Unit as part of the processing of the EU Referendum Fees and Charges.

CB welcomed the findings, which provided further background on the claim processing work and challenges in delivering this work. The Commission is only responsible for processing fees and charges related to the EU Referendum, the Cabinet Office hold responsibility for other polls.

ECS concluded that the report had highlighted that, if we were to undertake the process again, we could put in place a detailed Service Level Agreement (SLA) to support future work.

Noted.

KT advised that this update, which resulted from a previous internal audit report, would be circulated outside of the meeting due to unavailability of staff. 

Agreed: That the written update will be circulated outside of the meeting.

LN updated on the draft internal audit plan, and CB noted that timings for some audits may change to ensure we have sufficient time to make the best use of the audit recommendations.

Noted. 

KT introduced the Review of Anti-Fraud Policy, noting that this was an annual review, and the key update related to the inclusion of a section on externally perpetrated fraud. CB observed from a stylistic perspective, it would be helpful if only the proposed changes were circulated to the Board, to enable readers to quickly identify changes.

Agreed: That the policy had given sufficient guidance and support to the Commission in preventing and detecting fraud. 

GT introduced the Whistleblowing policy, noting the minor changes resulting from recommendations from Audit Committee last year.

In response to a question, GT agreed to amend section 13.3 to provide further clarity on Mazar’s role in the escalation process. In relation to section 6.6, GT will also review the wording to ensure it reflects best practice.

It was noted that the paper had been written with Dean Parker, as Chair of the Audit Committee in mind, and any changes to the Chair would require the policy to be amended.

Agreed: To note the amendments proposed for the policy in the paper, subject to the further revisions. 

KR introduced the paper, advising that a further discussion is required with Sue Bruce to agree the approach for this report. Members suggested that reference should be included to any outstanding audits and RMJ noted that on Appendix C, NAO items should be moved to the external audit section. ECS recommended that an Annual Table of Internal Audit responses, those which have been answered, those which have a good reason for delay (long term objectives) and those which have not been dealt with should be included.

KR confirmed that once a discussion had taken place with Sue Bruce, an updated report will be put forward before the Committee.

Noted. 

KR advised the Committee that there were no major changes in the policies, which will be used to prepare the 2017-18 accounts. RMJ commented there were two new standards which will be effective in 2017, noting that they are not material but need to be referenced. TB advised she would amend the paper as necessary.

Agreed: That the Accounting policies to be used in preparation of the 2017-18 accounts be endorsed.

JCD introduced the report, highlighting the work being undertaken to continue effective management of information risk, specifically the ongoing work to prepare the organisation’s compliance with General Data Protection Regulations (GDPR). It was noted the growing importance of providing assurance in this area in particular on cyber security, and it was suggested that this topic could be the focus of a future deep dive.

In response to a question about the number of FOI requests we received, CB noted that provision has been included in the 2018-19 budget for an FOI support role.

Agreed: The Audit Committee confirms this assessment of the effectiveness of overall information risk management including assessment against relevant guidance and frameworks.

In response to a question about the risk relating to digital campaigning, and whether that should be specifically referenced in the risk register, CB advised she would discuss further with the Director of Political Finance and Regulation.

The Assurance Map was discussed by the Committee and CB advised that the mapping exercise which we had previously undertaken would be revisited by SLG to provide assurance for existing and emerging risks, and ensure we have the right mitigations in place.

Agreed: That, noting the points made during discussion, the risk registers be noted

CB advised that the tracker with the schedule of audit recommendations was not fully up to date and needed to be revised. An updated version would be circulated to the Committee before the next meeting.

Noted.

AM updated that his sole interest outlined in the register was no longer applicable and could be removed.

The Chair of the Commission Board’s latest interest on the register was noted.

CB said that one of her declarations appeared to have been omitted from the paper.

Noted: the changes to the register and agreed that approval be sought outside the meeting, after a final circulation to those concerned.