Audit and Accountability Meeting Minutes - 27 April 2023
Chair – Welcome and Apologies
Declaration of Interests – review & update
Minutes and actions arising from previous meeting
Minutes – for approval
Risk - Richard Mackie, RSM
Internal Audit – Michel Gibson, RSM
External Audit – Brian Battison, Audit Scotland
Items to be taken in Private
Performance Management Report – Corporate Services
Corporate Services Performance Management Report
Performance Management Report – Reviews
Performance Management Report – Investigations
Any other business
Audit & Accountability Committee
Catherine Dyer (Chair) Elizabeth Humphreys (LH)
John McCroskie (JMcC) (attending via MS Teams for Agenda items 1-4)
Lena Collins (LC) Michelle Wailes (MW) Robert Scott (RS)
Michelle Macleod Commissioner (MML)
Phil Chapman Director of Operations (PC)
Sharon Smit Accountable Officer / Head of Corporate Services (SS) Jennifer Fisher Secretariat (JLF)
Richard Mackie, RSM (RM)
Brian Battison, Audit Scotland (BB)
Hollie Adams, RSM (HA) (attending via MS Teams (Agenda item 9 only)) Michael Gibson, RSM (MG) (attending via MS Teams (Agenda item 9 only)
Welcome and Apologies
The Chair welcomed everyone to the PIRC Audit and Accountability Committee meeting and introductions were made. It was agreed that there would be a break for lunch after the conclusion of item 4 Risk and it was noted that JMcC would attend via MS Teams for the morning session and in person for the items after lunch, including items 4.4 – 4.6 on Internal Audit.
No apologies were noted.
Members agreed to consider agenda items 9-12 in private.
Declaration of Interests – review and update
The Chair notified members of her recent appointment as an ad-hoc non-Executive Director member of Redress Scotland’s Audit, Risk and Assurance Committee.
It was agreed that Declaration of Interest forms would be re-issued to all members to update and return to PIRC to retain.
Minutes and actions arising from previous meeting Minutes
The minutes of the February 2023 meeting were approved.
Amendment to action 52; ‘External Audit – 2022/23 External Audit plan to be circulated to members when available’.
- Risk Appetite
RM presented members with an overview of the proposed Risk appetite definitions for 2023-2024.
Averse Avoidance of any risk exposure
Minimal Ultra-safe leading to only minimum risk exposure as far as practically possible; negligible/low likelihood of occurrence of the risk after application of controls
Cautious Preference for safe though accept there will be some risk exposure, medium likelihood of occurrence of the risk after application of controls.
Open Willing to consider all potential options, subject to continued application and/or establishment of controls; recognising that there could be a high-risk exposure.
Hungry Eager to be innovative and take on a very high-risk level of risk but only in the right circumstances.
RM provided members with an overview of the 7 draft Strategic Risk Assurance Themes identified for 2023-2024: Operational Delivery, Reputation, Finances, People, Improvement, Governance and Engagement.
RM also provided members with results of the PIRC Risk Survey (completed in February / March 2023) and the PIRC Risk Appetite Survey (completed in April 2023).
There followed a detailed discussion regarding the risk appetite for each of the specified risks. Following discussion, RM agreed to update the risk appetite statement to reflect the outcome of the discussion as agreed by members.
AP1 2023: Risk Appetite Statement to be drafted and forwarded to SMT and AAC members for approval.
Update: The Risk Appetite Statement has been revised in accordance with the consensus agreed at the meeting and is attached at Annex 1.
- 4Risk Software Demonstration
RM provided members with a brief overview of the PIRC Risk Register utilising a test site of the 4Risk software.
RM highlighted that each user dashboard can be configured to provide PIRC Risk Owners and Risk Coordinators with oversight of all areas of responsibility, control, assurance and actions and to generate appropriate reports.
Members noted the content of the presentation and commented that the software appeared to provide a useful tool for the risk managers and their teams.
1310hrs – JMcC joins meeting in person
RSM DRAFT Annual Report 2022/2023
MG provided members with a detailed summary of the Annual Internal Audit Report 2022/23 (circulated in advance), noting the following:
Summary of the three audits and one follow-up audit concluded within the year (Flexitime, Creditor Payments including Procurement Cards and HR Recruitment and Selection).
Actions agreed to address the previous years’ internal audit findings have shown that PIRC has made reasonable progress in implementing the agreed actions. Of the 18 actions reviewed, 10 were found to be implemented, one not implemented, two-partially implemented and five had been superseded.
The internal audit opinion for PIRC is noted as ‘adequate’ – the organisation has an adequate and effective framework for risk management, governance and internal control.
Members noted the update provided.
LH noted that this was a good outcome for PIRC and reflective of the information and updates provided to members throughout the year.
Internal Audit Action Log
SS provided a summary of the Internal Audit Action Log (circulated in advance). SS advised that 1 action was ‘complete’ and 2 actions ‘In progress’.
Members noted the update provided
Internal Audit Plan 2023/2024
MG provided members with a detailed summary of the Internal Audit Strategy and Internal Audit Plan 2023/24, noting the following:
Three risk-based audits (Productions, Training and Health and Safety), and one follow-up audit will be conducted throughout the year.
The level of resource required to deliver plan is 20-days at a cost of £12,500.00 in line with agreement made upon appointment.
Representatives from RSM will attend two committee meetings per year (virtually) to provide an update on the progress made within audits and to provide the annual opinion.
SS highlighted that the areas selected for audit are linked to the Risk Register and are either, due to be audited or have not been audited in previous years.
MW questioned why there were no finance audits planned for the year, highlighting that risk associated to finances scored higher than those associated with service delivery. SS confirmed that finance(s) have been audited every year whereas the procedures, retention schedules and controls in place for productions have not been audited previously and given the increased volume of productions and documentation held by PIRC, she is keen that the processes are audited to ensure compliance. Chair highlighted that the production audit would also link to reputational risk.
RS questioned if the Health and Safety audit would solely be focused on the Management of Occupational Risk (MORR) procedures. SS noted that road risk is one of the biggest risks facing PIRC and auditing the processes and procedures in place would help to mitigate any risk including areas such as application, interpretation, recording and management.
RS noted that every year there should be a Health and Safety element included within internal audit schedule. SS agreed to review this with RSM for the 2024/2025 plan.
Members noted that they were content with the 2023/2024 Internal Audit plan as presented and the Chair asked that the 2024/2025 plan be shared with members at the January 2024 meeting.
Investigations Case Study Presentation
John McSporran, Head of Investigations and Stevie Carr, Senior Investigator, presented members with a case study of a recently concluded investigation.
The presentation examined a Police Discharge of Firearms and Serious Injury on 31 March 2022 in the Inverness area. The presentation focused on:
- What happened
- Referral to PIRC
- PIRC’s response
- The PIRC Investigation (Post Incident Procedures, Initial Actions at the Scene, Further enquiries undertaken)
- Findings and Recommendations made by
- In the course of the presentation, when it became apparent that the incident had included engagement at the locus by Scottish Fire and Rescue Service (SFRS), RS reminded the Chair and members of an associated interest in consequence of his position as HM Chief Inspector of the SFRS. It was agreed that there was no conflict of interest.
Members noted the content of the presentation.
The Chair thanked John and Stevie for their attendance and informative presentation.
External Audit – Audit Scotland
BB provided members with a summary of the Annual Audit Work Plan for 2022/23 (circulated in advance). BB advised that this is the first plan of a five-year audit cycle to be provided by Audit Scotland.
BB highlighted that the main elements of the work being undertaken by Audit Scotland are:
An evaluation of the key controls within the main accounting systems,
Understanding the business of the PIRC and associated risks which would impact on the financial statements,
An audit of the annual report and accounts, and provision of an Independent Auditor’s Report,
An audit of opinion on regularity and other statutory information published within the annual report and accounts including the Performance Report, the Corporate Governance Report and the Remuneration Report and Staff Report,
Reviewing the appropriateness of the disclosures in the Governance Statement and the financial sustainability of the organisation and its services,
Consideration of Best Value
It was noted that, based on an assessment of the needs of the users of the financial statements and the nature of PIRC operations, for the year ending 31 March 2023:
Planning Materiality has been set to 2% of gross expenditure (£121,000)
Performance Materiality has been set at 75% of planning materiality (£91,000)
Reporting Threshold has been set at 5% of planning materiality (£6,000).
BB noted that Scottish Government has approved the proposed annual report and accounts timetable as shown within the Audit Plan.
LH asked what plans were in place for Audit Scotland to attend AAC meetings. BB advised that representatives would attend all meetings within year 1 of the audit cycle and then on an ad-hoc basis.
Members noted the content of the update provided.
MML provided a written update to members (circulated in advance), on a range of ongoing work, including:
- Sheku Bayoh Public Inquiry
- Lady Angiolini Review
- Civil Case
- Stakeholder Engagements
- Publication of the report of the Joint Audit between PIRC and SPA – of the Complaint Triage by Police
- Scotland’s National Complaint Assessment and Resolution Unit (NCARU)
- MML advised members that due to parliamentary procedural restrictions, she was unable to provide a detailed update in relation to the Police Complaints and Misconduct Handling Bill prior to its publication on the Scottish Parliament website. MML assured members that robust discussions are being held with colleagues within the Scottish Government Bill Team in relation to the implementation of the recommendations.
JMcC noted that the bill was due to be published in June 2023 but highlighted that there had been some slippage to timescales with other bills and asked what impact, if any, this would have should the Police Complaints and Misconduct Handling Bill be delayed. MML advised there would be no adverse impact to PIRC in the event of a delay to the Bill.
Note – Published on 6 June 2023 - the Bill is know as the Police (Ethics, Conduct and Scrutiny) (Scotland) Bill: - Police (Ethics, Conduct and Scrutiny) (Scotland) Bill
Strategic Plan 2023-2025 – verbal update
MML advised that final publication / design adjustments are being made to the DRAFT Strategic Plan (circulated to members on 29 March 2023).
Once concluded, the Strategic Plan will be published.
Update: The Scottish Government requested some additional material to be added. The Strategic Plan has now been signed off at Ministerial level. A revised copy will be circulated to members.
Performance Data Review – verbal update
MML provided an update in relation to the implementation of new Key Performance Indicators (KPIs) following a Performance Data Review of the operational functions of PIRC.
MML advised that work continues to progress the implementation of 25 recommendations made within the review, such as, the recruitment of a Senior Administrator, adopting a statistical counting approach similar to the Independent Office for Police Conduct (IOPC) whereby complex cases or cases significantly protracted for reasons outwith the control of PIRC are recognised as exceptions and not included in the reporting of KPIs to avoid inappropriate skewing of these reports, but that AAC will be provided with details as to progress in respect of the exception cases, improved use of Clue and Centurion software (Case Management databases used by Investigations and Reviews departments) and taking account of delays outwith PIRC control.
LH asked if there had been any public experience feedback sought as part of the review. MML advised that focus groups had not been consulted as the project was in essence dealing with internal practices and procedures. Chair suggested that engagement of a focus group could be considered at a later date.
MML advised that a further update would be provided at the July 2023 AAC meeting.
AP2 2023: Performance Data Review – update to be provided at July 2023 meeting in relation to implementation of new KPIs.
PIRC Management Accounts to March 2023
SS provided a detailed summary of the Management Accounts as at end of March 2023, highlighting the following areas:
Grant in Aid cash drawn down is £295,000 more than initial
Staffing costs are underspent due to a number of vacancies across the organisation,
Legal costs overspent by £285,000 due to costs associated with the Public Inquiry. Scottish Government has since recognised this in the Spring Budget Revision (SBR), with an additional £278,000 to alleviate cost pressures arising from the Public Inquiry and £71,000 for Capital spends,
Draft final position is £37,000
Members noted the update provided.
MML advised members that responsibility for the PIRC Sponsor team has moved to the Scottish Government Police Division and will be overseen by John Somers (Deputy Director) and Murray MacVicar (Head of Police Powers, Strategy and Sponsorship Unit). MML advised that introductory meetings had been scheduled for early May 2023 and reassured members that the transfer to Police Division would be seamless and without disruption.
SS advised that Murray MacVicar had indicated he would welcome the opportunity to attend a future AAC meeting as an observer. Chair noted this would be welcomed by members.
Next meeting - Thursday 27th July 2023