Our business

Welcome and Apologies 
Minutes and Actions
Commissioner’s Update 
Risk and Control 
Internal Audit 
External Audit 
Finance

Attendees

Audit and Accountability Committee

Catherine Dyer (Chair) 
Elizabeth Humphreys (LH) (attending via MS Teams)
John McCroskie (JMcC) (attending via MS Teams)
Robert Scott (RS)
Lena Collins (LC)
Michelle Wailes (MW) 

PIRC

Michelle Macleod Commissioner (MML)
Phil Chapman Director of Operations (PC)
Sharon Smit Accountable Officer / Head of Corporate Services (SS) 
Jennifer Fisher Secretariat (JLF)

Auditors

Brian Battison Audit Scotland (BB)
Michael Gibson RSM (MG) (attending via MS Teams – agenda item 5 only)

Scottish Government PIRC Sponsor Team (Observers)

Avril Davidson Unit Head of Finance, Sponsorship, Telecoms and Business Support, Police Division (AD)
Beatriz Sanchez Finance and Sponsorship Lead (BS)
Brenda Kerr Sponsorship Manager (BK)

1. Welcome and Apologies

The Chair welcomed everyone to the PIRC Audit and Accountability Committee (AAC). 

Members agreed to consider agenda items 8-12 in private, for the reasons set out on the agenda.

Declaration of Interests 
RS declared he had been appointed as a Trustee of the Firefighters Memorial Trust.  JLF agreed to amend RS’s website biography to reflect this.

2. Minutes and actions arising from previous meeting.

2.1 Minutes

The minutes of the February 2024 meeting are approved as accurate. 

2.2 Action Log

The action log was reviewed - all completed actions were removed.

AP3 (2023-2024) – Performance Reports to include annual trend report covering 3-year period to be provided with Q4 Reports.
See agenda item 8.3, 9.3 and 10.3

AP10 (2023-2024) – Risk History Report – Alternative format to be provided.
See agenda item 4.2

AP 11 (2023-2024) –Register of Interests to be added to AAC Members profiles on PIRC Website.

AP 12 (2023-2024) – Summary of Risk Coordinators role and responsibilities to be provided.
See agenda item 4.3

AP13 (2023-2024) – Risk Reports – provide report noting current position, areas of issue / concern and areas of progress.
See agenda item 4.2

AP14 (2023-2024) – Risk Appetite – Internal Review of Risk Appetite.
See agenda item 4.1 - a review of PIRC Risk Appetite will be undertaken on an annual basis.

AP15 (2023-2024) – MORR Policy – update in relation to compliance with processes as set out in the MORR Policy.

PC advised that Raymond Brown, Head of Investigations (RB) has implemented several processes and procedures to comply with the MORR policy, i.e. Senior Investigators (SI’s) and Deputy Senior Investigator’s (DSI’s) are required to: 

• Ensure that staff have complied with procedural responsibilities as outlined within the policy.
• corroborate that staff have completed vehicle inspections to ensure the vehicle is safe and fit for purpose. 
• undertake dip sampling of vehicle journey logs to confirm pre-journey safety checks list compliance rates are in-line with policy. 
• undertake dip sampling of journeys exceeding 3-hours to ensure driver risk assessments have been completed.

3. Commissioner

3.1 Commissioner’s Report

MML provided an update to members on a range of ongoing work, including:

Sheku Bayou Public Inquiry (SBPI)
MML advised that the Inquiry (Hearing 3, part 2 (Post Incident Management, PIRC)), commenced on 6 February 2024 and sat until 8 March 2024, with several PIRC staff attending to provide evidence. 

Hearing 3, part 3 (COPFS evidence)) commenced on 16 April and is scheduled to conclude on 3 May 2024. No PIRC staff will attend this hearing.

Several PIRC staff (current and former) have received Rule 8 requests to provide evidence in the form of a written statement (MML, SS, former Director of Operations, former Training Coordinator). It is expected that MML and SS may be called to provide evidence to the Inquiry during the next hearing, scheduled to sit in early June 2024. This hearing will consider evidence relating to race and the training provided by Police Scotland, the PIRC and Crown Office on diversity.

Work continues to review the significant volume of disclosures being made daily and consider any proposed redactions ahead of Core Participant disclosure – MML and Sharon Clelland, Head of Legal Services (SC), continue to engage with Senior and Junior Counsel in preparation of future hearings. 

MML advised that she and SC had met with Junior Counsel to the Inquiry, Rachael Barrett, to discuss the next set of hearings (June 2024). Ms Barrett had advised that 2 experts have been identified to prepare and provide reports to the Inquiry, one being a contextual literature review of any themes identified from relevant research literature, inquests, reviews and inquiries undertaken previously covering the subject of race and policing. 

Civil Case
MML advised the pursuer had lodged an appeal with the Court of Session, which was refused. The pursuer has now lodged a further application to appeal with the Court of Session. Submissions have been lodged on behalf of PIRC opposing this application. 

Additionally MML advised that Counsel for the pursuer have lodged a motion for matters to be dealt with at a hearing rather than by written submissions. 

Further update will be provided when available. 

Police (Ethics, Conduct and Scrutiny) (Scotland) Bill (PECSS Bill)
MML, PC, SS and SC, continue to liaise with Scottish Government Bill Team to review Bill provisions and discuss preparations for the introduction of the PECSS Bill. 

MML advised that PIRC have been invited to attend the Criminal Justice Committee scheduled to be held on 15 May 2024 to provide evidence to the Committee. 

Further update will be provided when available.

Members noted the update provided.

4. Risk and Control

4.1 Risk Review and Risk Appetite 2024/2025

SS presented members with an overview of the updated Risk Register for 2024/2025. 

SS noted that comments/feedback received, had been considered when reviewing and amending the risk appetite scorings for 2024/2025.

Key items of note are:

• No new risks have been identified for 2024/2025
• Risk appetite definitions for 2024/2025:

• Risk have been renumbered:

SS advised members that the Risk Management Policy was currently being reviewed and updated and would be circulated to members for comment when available.

4.2 Risk Report

SS provided members with a revised summary overview of key information contained within the strategic risk register. SS noted that stylistic changes had resulted in the full register now being a particularly lengthy document however noted that copies are available on request, should members wish to review the full register. 

SS advised that a full register review was undertaken in March 2024, resulting in 176 updates being made. Following the review, no changes to risk scoring were identified. 

Members welcomed the new style summary overview report noting that the addition of a summary narrative of ‘action required’ was particularly helpful and highlighted to members areas where further discussion is required. 

The Chair and MW highlighted minor anomalies contained within the summaries of risk’s 3 and 6 and asked that these were corrected. SS agreed to amend the report.

4.3 Risk Co-ordinators – Role and Responsibilities

SS provided members with a summary of the role and responsibilities of the PIRC Risk Co-ordinators. Members commented on the comprehensive approach PIRC have taken in considering organisational risk.

5. Internal Audit

MG provided an overview of two audit reports (circulated in advance), highlighting the following areas:

5.1 Follow Up of Previous Internal Audit Management Actions

MG provided members with an update in relation to progress made against implementing the previously agreed management actions from the audits of Flexi-Time, Creditor Payments including Procurements Cards, HR: Recruitment and Selection and the Follow Up of Previous Internal Audit Management Actions 2022/2023. 

A total of 18 actions (four medium and 14 low priority) were highlighted following the audits. 

MG advised that 14 management actions have been fully implemented and four management actions noted as ‘ongoing’.   

5.2 Annual Internal Audit Report 2023/2024

MG advised members that, for the 12-months ending 31 March 2024, the auditors opinion is one of positive assurance - PIRC has an adequate and effective framework for risk management, governance and internal control. However, it should be noted that internal audit has identified further enhancement to the framework of risk management, governance and internal control to ensure that it remains adequate and effective. 

MG extended his thanks to SS and the Corporate Services staff for their support and assistance during the Productions, Training, Health and Safety: Management of Occupational Road Risk and 2023/2024 Follow Up audits. 
  
JMcC noted it was reassuring that all outstanding actions are progressing and will be concluded within the agreed timescales. 

5.3 PIRC Internal Audit Action Log 2023/2024 
SS provided a brief overview of all management actions noted to be ‘in progress’ at this time. 

Action 97 – Flexi audit 
SS advised this finding related to one incident whereby an employee’s flexi balance was re-credited but no follow up communication was issued to HR / management advising of the rationale for reinstatement. Line Managers have been reminded of the correct processes to follow when re-crediting employees flexi balances. 

Action 98 – Creditor Payments including Procurement Cards 
SS advised that training will be delivered to all procurement card holders to remind them of the procurement card policy and its requirements. Evidence of the training delivered will be retained for future audits. 

Action 99 – Follow Up Audit 
SS advised that Corporate Services and HR staff have undertaken a review of the onboarding and offboarding procedures, processes and paperwork to ensure that it formally captures all necessary steps and responsibilities, particularly with regard to provision for the immediate removal of access to IT systems for leavers in a timely manner. 

Action 100 – Follow Up Audit 
SS advised that cyber training will be delivered to all staff in early 2025 

MW highlighted that she found it difficult to track audit actions that have been ‘re-opened’ during the follow up audit and noted that it may be helpful if actions were captured, in the audit log, by the initial audit date rather than any follow up audit. 
  
SS advised that the initial audit date is provided in the auditors report which is presented to AAC, however explained that the auditor conducting the initial audit is not necessarily the auditor who would conduct the follow up audit and therefore noted dates would vary. 

RS asked for clarification as to why action 91 (Health and Safety: Management of Occupational Road Risk) was not implemented. SS advised that management had considered using CLUE (Investigative Management software) as a recording mechanism for vehicle use, however, advised that CLUE is primarily an investigative system used for recording activity and actions in respect of Investigations and is not designed to record vehicle usage. SS advised that current processes, although heavily reliant on staff completing manual paperwork, are supported by additional management checks (see item 2.2 – Action Log update, for additional information).

6. External Audit

BB provided members with a summary of the proposed external audit work plan for 2023/2024. 

BB advised that for the year ended 31 March 2024, materiality levels have been set as follows:

• Planning Materiality - 2% (£135k of gross expenditure).
• Performance Materiality – 65% (£88k) of planning materiality
• Reporting Threshold - £7k

BB advised that one significant risk of material misstatement to the financial statements has been identified;

• Risk of material misstatement due to fraud caused by management override of controls

BB noted that four wider scope areas to consider and conclude on the effectiveness and appropriateness of the arrangements in place have been identified as follows:

• Financial management – this means having sound budgetary processes. Auditors will consider the arrangements to secure sound financial management, including the strength of the financial management culture, accountability, and arrangements to prevent and detect fraud, error, and other irregularities.
• Financial sustainability – Auditors will look ahead to consider whether the body is planning effectively to continue to deliver services and considering financial sustainability in the medium (two to five years) to longer term (longer than five years).
• Vision, leadership, and governance – Auditors will conclude on the clarity of plans in place to deliver the vision, strategy, and priorities adopted by the PIRC. and also consider the effectiveness of the governance arrangements to support delivery.
• Use of resources to improve outcomes – auditors will consider how the PIRC demonstrates economy, efficiency, and effectiveness through the use of financial and other resources.

Finally, BB highlighted the target dates for audit outputs set by the auditor General for Scotland as follows:

• Independent Auditors report to be available by 31 October 2024
• Annual Audit Report to be available by 31 October 2024

The Chair noted that the audit fee has increased from the previous year’s and asked if this was commensurate across all Public Sector organisations. BB advised that he had no control in setting the audit fees but highlighted that overall, within Central Government (chargeable sectors), fees have increased by approximately 6%. 

MW asked for clarification of ‘Duty of Best Value’ and what this looks like for PIRC. BB explained that this is a standardised approach to ensure that ‘best value’ is appropriate, and proportionate to an organisations priorities, operating environments and scale.

6.2 Annual Report

SS provided a verbal update in relation to progress towards completing an initial draft version of the 2023/2024 Annual Report. 

SS advised that a report, showing wording and layout, will be available at the next AAC meeting for members to consider and provide comment on.

7. Finance

7.1 PIRC DRAFT Management Accounts to end March 2024 
SS provided a summary of the Management Accounts as at end of March 2024 (circulated in advance), highlighting the following areas:

• Grant in Aid cash drawn down is £63k less that post revisions budget of £6,808k due mainly to the delay in invoicing of legal costs relative to the ongoing Public Inquiry.
• An uplift of £492k was awarded to cater for pay award (£193k), legal costs (£160k), capital spends (£60k), accommodation costs (£54k) and DSSS costs (£25k), increasing the budget provision from £6,316k to £6,808k.
• Year end underspend of £139k in staffing due primarily to delays in fillings posts along with vacancies arising within the year – these are non-recurring savings.
• Year end overspend of £75k, funded from underspend within staffing costs and as agreed with SG.
• Total year end position of £63k underspend.

RS questioned why ‘Fees and Subscriptions’ was overspent for 2023/2024. SS advised that the 2024/2025 budget lines had been amended to reflect this. 

MW questioned why the spending for Fleet and Mileage was overspent. SS explained that due to workload, additional cars are currently on hire from supplier. SS noted that several high profile Investigations, required multiple journeys to and from the north of Scotland, resulting in higher mileage / fuel costs than budgeted for. PC noted that due to the nature of the investigations, staff required to attend in person to undertake enquiries or conduct face to face interviews / take statements. 

JMcC highlighted a note of caution in the use of ‘one off costs’ within ‘Media and Marketing’ spending and suggested this be changed to ‘website step change costs’. SS noted the comment raised and advised that the Finance Manager meets regularly with the Communications Team to review budgeting provisions for the website. 

MW asked what processes are in place to review variance against budget in 2024/2025. SS advised that a review of car usage is currently underway and that the Finance Manager meets with Sponsor Team monthly to review financial position. In addition, SS noted that there is continuous review of non-essential spending and efficiency savings.