Audit and Accountability Meeting Minutes - 5 February 2025
Attendees
Audit & Accountability Committee
Elizabeth Humphreys (Chair)
John McCroskie (JMcC)
Robert Scott (RS)
Lena Collins (LC)
PIRC
Michelle Macleod Commissioner (MM)
Phil Chapman Director of Operations (PC)
Sharon Smit Head of Corporate Services / Accountable Officer (SS)
Ilya Zharov Head of Reviews & Policy (IZ) (agenda item 1-4 only)
Jennifer Fisher Secretariat (JLF)
Audit Scotland
Brian Battison Senior Auditor, Audit Scotland (BB) (attending via MS Teams) (agenda items 9-14 only)
1. Welcome, Introductions and Apologies
The Chair welcomed everybody to the PIRC Audit and Accountability Committee (AAC).
Apologies were noted from Michelle Wailes.
The Chair formally noted her thanks to Catherine Dyer for all her work in forming, recruiting members and leading the AAC over the previous three and a half years.
1.1 Decision on taking business in private
Members agreed to consider agenda items 4 – 9 in private, for the reasons set out on the agenda.
2. Declaration of Interests
Nil to report.
3. Minutes and actions arising from previous meeting
3.1 Minutes
The minutes of the October 2024 meeting were approved as accurate.
3.2 Action Log
The action log was reviewed - all concluded actions were removed from the working log.
Matters to be taken in private
10. Commissioner’s Update
10.1 Commissioner’s Update report
MM provided a summary of the Commissioner’s update report (circulated in advance), highlighting the following:
Sheku Bayoh Public Inquiry (SBPI)
The petition lodged by the Chief Constable of the Police Service of Scotland of the process undertaken by the Deputy First Minister to determine the application made on behalf of a Core Participant to extend the terms of reference of the Public Inquiry was withdrawn on 3 February 2025 in respect that matters between parties were resolved extra-judicially and the remedies sought by the petitioner were no longer required.
MM and PIRC’s Head of Legal Services continue to liaise with Counsel to prepare written submissions ahead of closing submissions being presented to the Inquiry in mid-February 2025.
Civil Case: Scott-v-PIRC
PIRC received an award of expenses in January 2025 following successful opposition to the proceedings. SS and Finance Manager are engaged in discussion with SG Finance colleagues on how to record and reconcile the expenses received.
Members noted the updates provided.
11. Risk & Control – Accountable Officer
11.1 Strategic Summary Risk Report
SS provided members with an overview of the Strategic Summary Risk Report (circulated in advance), highlighting the following:
owing to a number of issues still to be resolved with the Oracle HR and Finance software (onboarding of staff, staff internal moves, making payments and receiving Grant in Aid payments) Risk 3 scoring has been adjusted (Inability to Effectively and Efficiently manage finances).
An internal review of membership of the Risk Coordinators group will conclude in February 2025. Additional training for existing and new Risk Coordinators will be provided.
11.2 Draft PIRC Risk Reports
SS provided members with 4 sample risk reports available from the 4Risk system. Following brief discussion, the Chair selected report 3 and asked if a ‘target end date’ column could be included in the report. SS agreed.
SS asked members to consider delaying the Risk Appetite review until 2026. The Chair asked that the agenda for of the May 2025 meeting included confirmation that there is no requirement to externally review and change risk appetite scorings on an annual basis. Members agreed that the review would therefore be scheduled for July, SS advised that she could issue ‘Risk Appetite Questionnaires 2025’ to members and collate responses ahead of this meeting.
Members noted the updates provided.
12. Internal Audit – Accountable Officer
12.1 Internal Audit Progress Report
12.2 Internal Audit Report – Payroll
12.3 Internal Audit Report – Complaints Handling
12.4 Internal Audit Report – Performance Statistical Reporting
SS provided members with a summary of the Internal Audit Progress report, Payroll Report and Complaints Handling Report (circulated in advance) and advised that the draft Performance Statistical Reporting report (not circulated) contained 2 low level management actions and would be available for May 2025 meeting.
SS provided members with a copy of the Internal Audit Action Log highlighting the actions identified within the above audits and the agreed action to be undertaken to address the auditor’s findings.
The Chair noted that the audit findings were reassuring and provided a strong range of assurance across the organisation.
SS advised members that the Internal Audit contract was due for renewal. SS had held discussions with RSM, however, they have advised that they would require a minimum of 35 days of audit (the current agreement is for 20 days). SS advised members that 35 days of audit was not viable and would require a significant level of work to be undertaken by PIRC Corporate Services staff. Costs were also a concern. SS advised she would undertake a tender exercise, noting that historically, there has not been a positive response to this. SS thanked BB for his suggestion of potential solutions including to liaise with SG colleagues in respect of securing Internal Auditors for 2025/2026. BB and SS to discuss further with SS updating members with progress.
13. External Audit – Audit Scotland
BB advised members that audit dates had been agreed with the initial phase of audits commencing in late March / early April 2025. BB advised members the Audit plan would be available for the May 2025 AAC meeting.
14. Finance – Accountable Officer
14.1 PIRC Management Accounts to end December 2024
SS provided a summary of the Management Accounts as at end of December 2024 (circulated in advance), highlighting the following areas:
Grant in Aid cash drawn down is £188k less than budget due to vacancies (currently in the process of being filled) and budget phasing in running costs.
Staff costs are £314k under spent due to delays in filling posts along with vacancies arising within the year. These are non-recurring savings.
Running costs are £70k overspent, due to legal costs associated with the Public Inquiry and the civil case, offset by underspends caused by budget phasing e.g. Invoices previously delayed due to Oracle implementation paid in November 2024 (budgeted in other months)
Discussions continue with SG colleagues how to account for the award of legal expenses PIRC received in January 2025 and the IFRS16 allocation.
Year end position is expected to be approx. £100K underspend, excluding award of legal fees and IFRS16 allocation
Additionally, SS advised members she had received verbal confirmation of the 2025/26 budget but had not yet received written confirmation.
Members noted the update provided.
15. Any other business
The Chair presented gifts to MM to acknowledge her retirement and thanked her for her hard work and commitment to the organisation. MM thanked the Chair and committee members for their support and challenge and noted that through joint working of both groups, the organisation was in a much stronger position.