Audit and Accountability Meeting Minutes - 31 October 2024
Attendees
Audit & Accountability Committee
Catherine Dyer (Chair)
Elizabeth Humphreys (LH)
John McCroskie (JMcC)
Robert Scott (RS)
Michelle Wailes (MW)
Gillian Imery (GI) - Observer
PIRC
Michelle Macleod Commissioner (MML)
Phil Chapman Director of Operations (PC)
Sharon Smit Accountable Officer / Head of Corporate Services (SS)
Ruth McCallum Secretariat (RMc)
Audit Scotland
Brian Battison Senior Auditor, Audit Scotland (BB)
RSM
Michael Gibson Managing Consultant (MG) (attending via MS Teams)
1. Welcome, Introductions and Apologies
The Chair welcomed everyone to the PIRC Audit and Accountability Committee (AAC).
1.1 Decision on taking business in private
Members agreed to consider agenda items 10-13 in private, for the reasons set out on the agenda.
2. Declaration of Interests
Nil to report.
3. Terms of Reference (ToR)
Amended ToR approved.
4. Minutes and actions arising from previous meeting.
4.1 Minutes
The minutes of the August 2024 meeting were approved as accurate.
4.2 Action Log
The action log was reviewed - all completed actions were removed.
AP5(2024-2025) – Finance – Completed relevant commissions to be included with Management Accounts –COMPLETE
JMcC asked for clarification on definition of a commission. SS distributed a paper copy to AAC showing a log of SG requests 2024/2025.
5. Commissioner
5.1 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 8 – Training and Race, had begun on 1 October and concluded on 9 October 2024.
No PIRC staff attended this hearing.
The next hearing, Closing Submissions, is due to commence on 3 December 2024. The Commissioner, Head of Legal Services and Counsel continue to prepare written submissions ahead of draft closing submissions being presented to the Inquiry by 27 November 2024.
Work continues to review a number of disclosures and consider / propose redactions ahead of core participant and public disclosure.
Update: the previous timetable has been suspended to await a decision on whether the remit of the Inquiry is to be extended to include the decision of the COPFS not to prosecute any of the officers involved.
Civil Case
At a hearing on 18 June, permission for the pursuer to appeal to the Court of Session was refused and PIRC was awarded judicial expenses. Anderson Strathearn has prepared and lodged an account of expenses incurred. A further update will be provided when available.
Police (Ethics, Conduct and Scrutiny) (Scotland) Bill (PECSS Bill)
PIRC’s response to the Criminal Justice Committee Stage 1 report, was submitted on 29 August 2024.
On 10 September 2024, Angela Constance, Cabinet Secretary for Justice and Home Affairs, addressed Parliament on the general principles of the Bill.
Stage 1 ended on 10 September 2024 and moved to Stage 2 – proposed amendments to the Bill.
On 2 October 2024, the Criminal Justice Committee met to consider Stage 2 amendments as proposed by MSPs.
Stage 2 amendments were debated on 2 October 2024. A transcript of the debate is attached. None of the approved amendments create any difficulty for PIRC.
The Bill now moves to Stage 3 – final changes and vote. The final Bill will be published at the conclusion of Stage 3 proceedings.
Strategic Update Meetings
The Commissioner, Head of Corporate Services/Accountable Officer and Director of Operations held a series of meetings with all staff to provide strategic updates on current and future issues that will impact on PIRC including the PECSS Bill, disclosure of PIRC reports, the Public Inquiry, and the ongoing PIRC Strategic Review.
The Commissioner advised that there has been a change to the law of corroboration of which PIRC had just been made aware. She has asked COPFS for guidance as a priority on what the implications are for PIRC. Further updates will be provided once we have more information.
The Chair asked if we are awarded expenses do we have to give it back to SG? The Commissioner advised that we would disclose any expenses received in relation to the civil case to SG.
MW asked if PI ends soon, is there any emerging areas that may impact on PIRC. The Commissioner said that the race hearings have looked at ways of investigating allegations of discrimination. Difficult to predict what will be the focus as questions can be one track and not general questions. PIRC has undertaken many EDI initiatives and there has been a focus on diversifying our recruitment process to pre-empt some of the commentary.
Members noted the update provided.
6. Risk and Control
6.1 Risk Report
SS provided members with an overview of the Strategic Summary Risk Report to October 2024 (circulated in advance). She advised that there were no new updates. Risk Coordinators are getting used to the new risk system.
Discussion took place around the need for a new risk about uncertainty, particularly around the unknowns and corporate risk uncertainty. Following discussions, it was acknowledged that this type of risk is captured throughout the Risk Register but that consideration could be given to strengthening language to better capture the uncertainty. Agreed for LH and SS to have a further discussion on this.
RS asked for a review of financial risk. The three year finance plan mentioned in the risk register will need to consider staff costs in line with new budget allocation. Any Commissions requested by SG looking for efficiencies would be of interest to AAC.
JMcC asked if any modelling we have with SG and sponsor team could be shared.
SS explained that we model with a number of assumptions - a 5% increase on pay and 5 % increase in suppliers’ costs while maintaining a flat cash budget and what that means. We highlight our risks at every meeting. Our costs are mainly staff costs and the only saving is not to backfill a vacancy. Everything request made to SG is supported by a business case and not just a number.
It is unclear how we will be affected by the budget. While we continue to track all spend, it is clear that costs are increasing and we are at risk of being overspent if budget allocation is reduced.
MW asked why governance was being reviewed when it was within appetite. SS confirmed that this was a team action to ensure processes were fit for purpose, not in reaction to a trigger scoring.
Risk 1 – Oracle will change this risk.
RS commented that risks were very corporate, H&S, staff risks. MORR policy shows risks and he queried where they sat. SS explained job risk assessments are completed. Two members of staff are trained in risk assessments, more will be trained. Health and Safety Group meet every 2/3 months and report on any risks. Any relevant risks will be brought to AAC.
Members noted the update provided.
7. Internal Audit
7.1 Internal Audit Progress Report
MG provided members with an overview of the Internal Audit – Progress Report (circulated in advance) highlighting the following;
Payroll Audit – completed in a timely manner. System changes noted. One low priority action noted.
SS commented that SG process our payroll according to our instructions. We follow a process and it is on us if not followed correctly.
AAC asked to see the full report of payroll audit.
Action: PIRC to circulate full report
Will need to look towards March 25 and to consider areas for internal audit. SS will put forward a proposal at next AAC meeting.
Members noted the update provided.
7.2 Internal Audit Action Log
SS provided a brief overview of the Audit Action Log (circulated in advance).
Action 98 – Creditor Payments including Procurement cards – now closed.
Action 100 – Follow Up Audit: Previous Follow Up IT Health check Audit (Aug 22)
SS provided AAC with draft report and advised that this will stay on the log until January when it will be concluded.
LH asked about SG phishing email testing for cyber awareness. SS advised that SG were sending such emails to staff to test awareness. SS also advised that our next Business Continuity Plan (BCP) test will be cyber related. We are speaking to SG to plan what we can use and will update AAC when we have more details.
MW asked about risk of Artificial Intelligence (AI). SS advised that we were aware of risk around AI and discussions were taking place.
Members noted the update provided.
8. External Audit
8.1 Audit Update
BB thanked SS, Laura Duguid (Finance Manager) and team for all their work and for facilitating a very smooth audit with little to report. No adjustment to accounts.
MW passed on her congratulations to have completed the audit timeously. MW asked BB about wording in his covering letter and queried whether there was anything AAC needed to know? BB advised this was standard caveat in such letters and there were no outstanding actions.
SS passed on her thanks to BB and his team. Much had been learnt from last year’s audit. Good work completed in a short time frame.
8.2 Annual Report
SS provided AAC Chair and members with a paper copy of a log of final changes to the Annual Report. Once these changes have been made it will go to publisher and then the DocuSign process.
AAC commented on how good the layout was, particularly the visuals. Discussion took place on how could PIRC promote themselves better. The Commissioner advised she had attended at SPA Board meetings to speak to the Annual Report over the last 2 years. It received positive feedback. There is also a wide stakeholder list for distribution of the report.
Members noted the update provided.
9. Finance
9.1 PIRC Management Accounts to end June 2024
SS provided a summary of the Management Accounts as at end of October 2024 (circulated in advance), highlighting the following areas:
September 2024 management accounts were derived from our own expenditure log as Oracle Cloud was not available during the week of preparation.
Grant in Aid cash drawn down is £97k less than budget due to vacancies (currently in the process of being filled) and budget phasing in running costs.
Staff costs £223k under spent due to delays in filling post along with vacancies arising within the year. These are non-recurring savings.
Running costs are £5k over spend, due to legal costs associated with the Public Inquiry and the civil case, offset by underspends caused by budget phasing e.g. SG Connect invoice received after the month it was budgeted.
SS advised that the business case submitted to SG for funding for Trainee Investigators had been turned down. The feedback from SG was that there had to be no unnecessary spend.
Members noted the update provided.