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 3.14In 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 3.17Governing bodies should ensure that VFM in procurement is 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. 3.18To obtain these assurances governing bodies should ensure that 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)

Sector Procurement Structure ENPC JISC LUPC SUPC NEUPC SPCE NWUPC REAG TUCO RCSPS Working Parties Procurement Scotland APUC Value Wales Institutions Procureweb Consortia OGC Buying Solutions / Procurement Scotland UUK Efficiency Group

Risk Management - Holistic Approach Identification and Management of Risk 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 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  Research Environment – REF Research staff populations  Legal – Bribery Act  Facilities – reduced capital funding state of buildings / facilities

Audit Committees – Hot topics  Internal Control Environment  Value for Money  Risk Management Assurances  Compliance - Bribery Act  Financial Statements – valuation of assets