Audit and Accountability Meeting - 21 July 2022
Agenda
Welcome and Apologies
Minutes and actions arising from previous meeting
Commissioner
Finance
Any other business
Attendees
Audit & Accountability Committee
Catherine Dyer (Chair)
Lena Collins (LC)
Elizabeth Humphreys (LH)
John McCroskie (JMcC)
Robert Scott (RS)
Michelle Wailes (MW)
PIRC
Michelle Macleod Commissioner (MM)
Phil Chapman Director of Operations (attending via MS Teams) (PC)
Sharon Smit Accountable Officer, Head of Corporate Services (SS)
Jennifer Fisher Secretariat (JLF)
Scottish Government Sponsorship Team
Neil Hastie Head of Community Safety (Observer)
Laura Stewart Head of PIRC Sponsorship Team (Observer)
Auditors
Michael Gibson, RSM (attending via MS Teams – Agenda Item 4)
Nneamaka Ochuba, AZETS (attending via MS Teams – Agenda Item 5)
Welcome and apologies
No apologies were noted.
Declaration of Interests
CD advised members that she has now withdrawn from a role within a charitable organisation and agreed to provide details to the Secretariat for removal from the Record of Declared Interests.
Minutes and actions arising from previous meeting
Subject to two amendments to the Action Log, the minutes of the previous meeting were approved.
Actions Update
2021-2022
Hybrid Model Survey Results - Complete
External Auditor – Complete
Whistleblowing Policy - Under consideration
2022-23
Complaints Performance Reports - Complete
Video to be added to website - Ongoing
Revised Hybrid Working Model - Complete
Accessibility Testing – Ongoing
Corporate Parenting – Complete
PIRC Website
JMcC asked if, while awaiting the development and delivery of the PIRC website, PIRC could update the current website with links to rich content i.e. YouTube channel with a video explaining role and remit of PIRC
PC advised that this option had been discussed with the current website provider, however, the current website, is outdated and the costs associated with adding rich content to the existing site are significant.
CD requested PIRC examine further if a link to a video hosted on a web platform was a possibility.
AP30 – Updated: PIRC to examine if it may be possible to provide link to a web hosted video (i.e. YouTube) explaining role and remit of PIRC.
Hybrid Working Model Guidance
RS questioned if the PIRC Hybrid Working Model Guidance (issued May 2022) was scheduled for review. SS confirmed that the guidance would be reviewed in September 2022 in conjunction with the Scottish Government Covid Working Group. Any amendments or updates to the document would be communicated to staff via the PIRC intranet site.
Internal Audit – RSM UK
Progress Report
In addition to the Progress Report circulated prior to the meeting, Michael Gibson, of RSM UK Risk Assurance Services (RSM) provided members with the following update:
Progress against the 2022/23 internal audit plan: 25% complete
One report has been finalised and issued since the previous Committee meeting - a Review of the Flexi-Time system. The audit resulted in one medium priority action being identified.
Due to resourcing issues within RSM, there had been a delay in submitting the IT Health Check audit report. He confirmed that it had been provided to PIRC 48-hours prior to the meeting.
Review of Flexi-Time Audit Report
The review of Flexi-Time Audit Report was circulated to members prior to the meeting. Members were asked to note the content of the Audit Report.
MW queried whether there was a concern around paying flexi balances to those leaving the organisation. SS confirmed that PIRC processes ensured that anyone leaving had a zero flexi balance at point of leaving. This is stipulated in the PIRC Flexi-Time policy.
LH commented that it was reassuring to note that only six staff had been identified, during the audit period, as having a balance of more than the upper limit and asked what processes were in place to highlight staff who were ‘bubbling under’ the upper limit. SS confirmed that a report is produced from the flexi system at the end of each 4-week settlement period and provided to managers to review. Any staff who are close to or have exceeded the upper level are asked to provide a rationale for their high balance and to take steps to reduce their outstanding balance.
LH also asked for clarification on why in the Flexi-time audit report, in the section regarding Findings / Implications, the upper limit is noted as ‘29 hours 36 Minutes’ whereas in the section regarding Management Action, the upper limit is noted as ‘30-hours’. SS suggested the figure had been rounded up but would highlight it to the Auditors and provide an update.
AP34 – Clarify discrepancy in Flexi-Time Audit Report - Confirm threshold limit and amend report to reflect same throughout.
Update: 22/08/2022 Complete – this was an extract from an excel document where the number had been rounded up from 29.6 which equates to 29 hours and 36 minutes
JM asked what the organisation is doing to address any high flexi balances in terms of Equality, Diversity and Inclusivity and if this was tracked in the staff survey carried out earlier in the year. SS confirmed that an updated Staff Survey is being prepared which will include questions regarding EDI. She further confirmed that the organisation has been working hard to promote taking flexi time both throughout the pandemic and hybrid working.
CD asked if flexi balances were higher in one department more than others and, if so, whether this was attributable to any specific reason(s). SS advised that flexi balances within the Investigations and Corporate Services department tended to be higher than Reviews. She further explained that this was primarily due to the type of work undertaken in Investigations i.e. the hours Investigators work in order to attend call outs / ongoing incidents that require a response and, on occasion, conducting interviews outside of standard core hours and the increase in recruitment had impacted on the balances of some Corporate Services staff.
MW asked if there were any areas of concern noted in the draft IT Health check report provided by auditors. SS confirmed that auditors had identified, as an area of risk, the need for training to heighten staff awareness of cyber security issues. Further discussion was planned regarding the findings of the report.
External Audit – Azets
Nneamaka Ochuba, Audit & Assurance Manager, provided a verbal update to members regarding the financial audit currently being undertaken. She advised:
An on-site audit had commenced on 18 July and will take approximately 2-weeks to complete.
Azets staff continue to progress with substantive testing and fieldwork.
Next Steps: following a review of files, Azets will meet with SS and Finance Manager to review the findings of audit.
Final report will be available for members to review and agree at the next meeting (scheduled for October 2022).
CD asked for confirmation of when the PIRC Annual Report is required to be presented to the Scottish Parliament. SS advised that the Annual Report should be submitted in November but agreed to confirm the exact date and update members.
AP35 – Audited Accounts - PIRC to confirm submission date of Annual Report to the Sponsor team who liaise with the Scottish Government/Parliament.
Update: Complete - Final PIRC Annual Report requires to be laid with Scottish Parliament prior to December 2022.
JMcC enquired if there would be an opportunity for members to have advance view of the audit report prior to the October meeting. SS confirmed that a draft report would be available to members ahead of the October meeting.
MW commented that the lack of engagement and information provided from the auditors, to the Committee, was concerning. She further added that the Committee should have sight of any papers, foreword of accounts and audited financial statements etc., ahead of the submission date.
CD commented that, in previous years, the Committee had received papers in advance to review and agree any amendments ahead of final submission.
LH commented that, in her experience, other Boards are afforded the opportunity to meet with Auditors without the Executive present.
CD noted that she was content to wait until the October meeting to review the Annual Report submission with a representative(s) of Azets, but asked that any contentious issues are highlighted and communicated to the Committee prior to the next meeting.
SS agreed to provide members with the ‘draft’ Annual Report as soon as practically possible, to allow members ample opportunity to review and provide comment / feedback.
AP36 – Audited Accounts - PIRC to provide draft audited accounts to committee as soon as practically possible in order to allow for review and comment ahead of October meeting
Commissioner
In addition to the Update Paper circulated prior to the meeting, MM provided the following update:
Public Inquiry (PI): MM advised, that following the unexpected resignation of Senior Counsel prior to start of Hearing 1, PIRC had engaged a new Senior Counsel the week before Hearing 1 commenced on 10 May.
MM explained that PIRC is represented by Senior and Junior Counsel which accords with the approach taken by other Core Participants including Police Service of Scotland, Scottish Police Authority, COPFS and the Bayoh Family.
When the PI is in session, Counsel attend the hearings, receive and review disclosure requests, propose lines of questioning for witnesses (Rule 9 submissions) and, if appropriate, ask supplementary questions of a witness.
The PI provided all Core Participants with a schedule of hearing dates in advance of Hearing 1 commencing and a witness attendance schedule is provided one week in advance. The hearing dates and witness schedules are often revised or cancelled at short notice (i.e. availability of expert witnesses or if evidence extends to 2-days, resulting in a delay to the schedule).
MM advised members that the PI is now in recess and will not meet again until November 2022 where outstanding matters from Hearing 1 will continue to be heard.
During recess, Counsel are scheduled to meet with MM, Head of Legal Services and Investigations staff to undertake a review of Hearing 1 and begin preparation for Hearing 2 and 3.
MM assured members that Counsel’s services are restricted as much as is practically possible, with substantial work being conducted in-house when appropriate by MM and Head of Legal Services to mitigate costs and allow Counsel to focus on preparation and attendance at hearings. It was further explained that counsel fees for August and September are expected to be considerably lower than those of May and June.
MM further advised that the Head of Legal Services continues to receive a high volume of requests from the PI legal team including requests for clarification of reports and explanations of technical matters. It is resource intensive and PIRC has limited control over any consequential expenses incurred.
CD noted her thanks to those involved with the PI and asked for clarification of any budgetary impact, in terms of associated legal costs. MM advised that PIRC has already incurred substantial legal costs arising from preparation and participation in Hearing 1, far exceeding the budgetary provision for legal costs. This overspend has been communicated to the PIRC Sponsorship Team and Director of Safer Communities on a regular basis and they are fully aware of PIRC’s position.
RS asked how PIRC record staff working hours associated with the PI. MM advised hours worked are recorded by staff on an in-house timesheet system.
MW asked that, as the PI was commissioned by The Cabinet Secretary for Justice, whether there is an expectation that PIRC will be covered by SG for all associated legal costs. MM confirmed that this was the expectation and advised that further discussion will be held with the Sponsorship Team in relation to the 2023-24 budget and associated PI legal costs.
JMcC noted that it would be helpful to have a realistic picture of the dialogue between PIRC and Scottish Government regarding associated legal costs. SS advised that, to date, PIRC has been able to cover legal expenses from Grant in Aid underspends in other areas, however, this position was not sustainable in the longer term.
LH thanked MM and SS for the updates and asked if a further update could be provided at the next meeting regarding the legal costs associated with the PI and what, if any, projects were being delayed / affected by this overspend.
AP37 – Public Inquiry – Legal Costs - PIRC to provide update to committee on legal costs
Public Consultation: Dame (Lady) Elish Angiolini’ s Review on Complaints Handling, Investigations and Misconduct Issues in relation to Policing launched on 24 May and will close on 16 August. The consultation consists of 4 sections. Section 2 is of most relevance an interest to the AAC (Section 2: asks for views on proposed changes to the governance and jurisdiction of, and additional powers for, the Police Investigations and Review Commissioner).
MM advised members that the SMT had met on 15 July to consider the organisational response to the consultation. The Head of Legal Services was preparing a first draft response which will be submitted to MM, for review and comment, by 22 July.
MM offered to share the draft submission with members prior to submission and to discuss the submission in detail at the October meeting.
AP38 – Public Consultation – PIRC to provide copy of draft organisational response to Dame (Lady) Elish Angiolini’ s Review on Complaints Handling, Investigations and Misconduct Issues in relation to Policing when available. Full review of submission to be discussed at the October meeting.
PIRC Reviews Single Points of Contact (SPoC’s): The Chair welcomed the introduction of Reviews SPOC’s
Civil Case: MM advised that a hearing for submissions is fixed for 8 August via WebEx. Senior Counsel will provide MM and Head of Legal Services with a draft submission in advance of lodging, for consideration and comment.
JMcC asked if there was any effect for PIRC following recent announcement from Scottish Police Federation (SPF) that officers would ‘work to rule’ following failed pay negotiations.
PC advised that there was no immediate impact on PIRC of officers withdrawing from ‘goodwill’ practices.
CD asked that members be notified if the action escalated and did begin to impact on the quality of service to PIRC.
AP39 – PIRC to highlight any impact on Investigations or CHR’s as a result of Police Officers withdrawing from ‘goodwill’ practices following stalled pay negotiations
Risk and Audit
Risk Register
Members were asked to note the content of the Risk Register that had been circulated prior to the meeting.
Strategic Summary Risk Report
In addition to the Strategic Summary Risk Report circulated prior to the meeting, SS provided the following update:
Budget confirmed as flat for 5-year period.
PIRC will continue to receive confirmation of budget annually.
Finance Manager will continue to submit 3-year forecasting of budget to SMT on a monthly basis for review.
Risk Coordinators: SS advised of the ‘Appointment of ‘Risk Co-ordinators’ who will be responsible for to providing monthly updates on progress against identified risks.
Each Risk Coordinator has been nominated because they are responsible for or work closely on matters relating to a specific risk and, therefore, would be aware of operational issues that could or would impact on the risk.
It is intended that the Risk Coordinators will meet with Risk Owners on a regular basis to provide feedback / and updates and all changes or updates to actions will be recorded on a template (to be drafted). They will have the role of ensuring that risk owners and the risk register is updated. Their role will be included as an objective on their appraisal form. This should ensure there is an increase in knowledge and understanding of risk across all areas of the organisation. To ensure that the coordinators are fully aware of what is expected of them, training will be provided by the Risk Management Consultants at RSM.
In addition, Risk Owners meet with MM, prior to every SMT, to review change forms and to focus on a specified number of risks to ensure an in-depth check is carried out with regularity.
JMcC welcomed the introduction of Risk Coordinators and noted that this would be beneficial in spreading ‘Knowledge of Risk’ across the organisation.
LC asked if there were any internal mechanisms or group review to prioritise Business Cases. SS confirmed that all Business Cases are reviewed by the SMT prior to submission.
LH noted that the scoring used in the report currently highlights mitigated scores and should be amended to show current risk and any inherent and residual risk scores.
MW noted that mitigation could reduce the risk scoring further.
SS advised that the mitigations in place are reviewed regularly and the register updated as required.
CD noted that she was content with the current actions and scoring in place.
Risk Register Updates
A paper outlining the updates to the Risk Register was circulated to members prior to the meeting. Members were asked to note the content of the paper.
Audit Log
In addition to Audit Action log circulated prior to the meeting, SS advised of the following:
The majority of actions relating to the Review of Trainee Programme are now complete. Following review, the University of West of Scotland course was found not to deliver what was required. Future Trainee Programmes will undertake study through an identified course with Police Scotland College.
A guidance document has been developed for trainees, mentors and all staff involved in the Trainee programme to ensure consistency. This guidance document will be utilised during the next intake of Trainee Investigators.
RS asked for confirmation on who had determined the ‘Priority / Timescale’ targets recorded. He opined that, in the current report structure, it could be perceived that the organisation has placed more urgency on reducing Flexi balances than staff development needs. SS advised that the priority / timescales targets had been set by the auditors. MM advised that the table could be amended and column where this data is recorded could be renamed to ‘Auditors Assessment: Priority/Timescales’.
AP40 – PIRC - rename column ‘Priority/Timescales to ‘Auditors Assessment: Priority/Timescales’
SS further advised that the action related to Flexi time (Audit Action Log No. 59) was complete.
Finance
PIRC Management Accounts
In addition to the Management Accounts update paper circulated prior to the meeting, SS advised of the following:
Approximate £73k underspend attributable to vacancies and recruitment process.
Approximate £102k overspend in Legal Costs attributable to legal fees for Counsel representing PIRC at the Public Inquiry.
SS further advised that PIRC has engaged with Prospect Union regarding pay negotiations, however, at this time no formal pay claim has been received.
JMcC noted that there are £0 funds allocated to the Capital budget for 2022-23 and asked what provision was in place for the planned Website Accessibility and upgrade. SS advised that underspends in staffing costs had been reallocated to this project.
JMcC noted that there are £0 funds allocated to Quality & Engagement budget for 2022-23. SS advised that no costs had been incurred in this area as meetings had been held remotely.
MW asked if the underspend attributed to vacancies and recruitment process was ‘banked’ for reallocation or if these savings would be reimbursed. SS advised that this underspend had been reallocated and it is not anticipated that there would be any reimbursement or underspend.
MW further asked if the underspend in staff costs was ‘keeping pace’ with overspend in legal costs. SS noted that legal costs were substantially higher than underspend and that the position was not sustainable.
MW questioned the reduction in staffing costs forecast for the 2023-24 budget. SS confirmed that the reduction in staffing costs was due to three Fixed Term Contracts (FTC) due to end in March 2023.
It was further noted that all planned projects have been very carefully budgeted.
LH noted that the staff costs 2024-25 increased from previous year and asked if this was attributable to anticipated recruitment and / or filling vacant posts. SS advised that the increase in staffing costs forecast for 2024-25 was due to natural pay increments and included a small % for salary increases.
Website Accessibility Update
The Website Accessibility and Website procurement process update paper was circulated prior to the meeting. Members were asked to note the content of the paper.
CD asked for clarification on who or what was responsible for causing the technical issues, PIRC or Website provider. PC confirmed that changes to the style and content of the CHR request form had caused the technical issues with the websites Java-Script programming. He further advised that the Communications Manager has liaised continuously with colleagues at Scottish Government Digital Team to seek advice and discuss all possible options, including third party solutions.
CD asked if there had been any costs incurred in updating the CHR request form. PC confirmed that there had been no additional costs in updating the CHR request form as the work had been carried out in-house prior to submitting the new form to the web provider.
MW asked for clarification on how testing of the new form was carried out when initially amended. PC confirmed that in-house testing had been carried out and the amended form had been accessible at that time.
Any other business
Whistleblowing Policy
LH noted that she found the tone of policy unnecessarily formal and suggested that it may discourage staff from reporting concerns. She offered her support to revise the policy so that it was more reflective of a policy that encouraged staff to ‘speak up’ rather than formal whistleblowing.
SS advised that the policy had been developed using the Scottish Government guidance and been reviewed by members of the SMT and Staff Representatives Group prior to providing to the members but welcomed the offer and would discuss with LH off table.
Date of next meeting - 19 October 2022