Key Financial Issues in the Audit
Committees and Responsibilities of
Governing Bodies
Nigel Paul
Director of Corporate Services,
University of Edinburgh
Topics
• Procurement
• Risk Management
• Audit Issues
Procurement - Why important
• Major area of spend
• Difficult compliance regime – Remedies directive
• Government expectations - savings delivery in current
public sector funding environment
• Scottish and Welsh government more detailed on
procurement policy compliance
• Part of government policy agendas e.g. economic
stimulus to small businesses, environmental and social
sustainability, eGovernment, shared services
HEFCE Model Financial Memorandum
(July2010/19)
13. The governing body of an institution is collectively responsible… for
overseeing its activities, determining its future direction and fostering an
environment in which its mission is achieved. …. there should be effective
arrangements for providing assurance to the governing body that the
institution:
– has a robust and comprehensive system of risk management, control
and corporate governance
– has regular, reliable, timely, and adequate information to
monitor performance and track the use of public funds
– …………………..
– uses public funds for proper purposes and strives to achieve
good value for money from public funds
– …………………
– considers our assessment of its risk status, engages with us
during the risk assessment, and takes action to manage or
mitigate the risk
CUC Guidance
•
3.14 In addition to the requirement under the Financial Memorandum for
governing bodies to ensure that there is a sound system of internal control,
they are responsible for ensuring the delivery of value for money (VFM)
from public funds. Procurement of works, goods and services is an
area where VFM considerations are important
•
3.17 Governing bodies should ensure that VFM in procurement is
•
3.18 To obtain these assurances governing bodies should ensure that
achieved through obtaining assurances that:
– adequate procurement policies and procedures are in place
– policies and procedures are consistently applied, and there is
compliance with relevant legislation.
the risk management framework and reporting mechanisms give
adequate coverage of procurement processes and risks. The
institution’s procurement procedures, including procedures governing
conflicts of interest relating to procurement matters, should form part of the
Financial Regulations, which should be approved by the governing body.
Sources of Assurance
• Annual Review of Procurement by Governing Body
– Governance - Procurement Checklist
– Procurement Capability Assessments
– Key Indicators – influence, benefit delivery – (BPI set)
– Development strategy & priorities
• Annual reports (though Audit Committees)
• Internal audit reports
Procurement Capability Assessment (Scotland)
Procurement Capability Assessment (Scotland)
Procurement Capability Assessment (Scotland)
Sector Procurement Structure
Institutions
Procurement Scotland
APUC
Procureweb
Consortia
OGC Buying Solutions /
Procurement Scotland
UUK Efficiency Group
Value
Wales
ENPC
JISC
LUPC
SUPC
NEUPC
SPCE
NWUPC
REAG
TUCO
RCSPS
Working
Parties
Risk Management - Holistic Approach
Identification and Management of Risk
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Risk Management Policy & Strategy - Risk Appetite
Risk Identification and assessment – Risk register/reviews
Risk Management –
– roles & responsibilities – management activities – improvement actions
Embedding Risk Management culture
– Planning Documents, Board/Committee papers, decision processes etc
– Project Risk Assessments
Risk Monitoring
– Programme of risk reviews / indicators, new/emerging issues
Governance and Assurance
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Reporting to Board / Governing Body
– Annual Risk Questionnaire and Specific Assurances
Audit (internal and external) feedback on management of risks
Risk Management – Hot topics

Financial Environment – Actions and Change Management
Staff / unions

Student Environment – Demonstrations
Consumerisation of HE
Student experience/services
UKBA
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Research Environment – REF
Research staff populations
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Legal – Bribery Act

Facilities – reduced capital funding
state of buildings / facilities
Audit Committees – Hot topics
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Internal Control Environment
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Value for Money
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Risk Management Assurances
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Compliance - Bribery Act
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Financial Statements – valuation of assets