The Learning and Skills Councils Annual Report and Accounts for ...

Statement on
Internal Control
The Accounting Officer’s Statement
on Internal Control 2009 –10
Scope of
responsibility
1. As Accounting Officer for the
Learning and Skills Council, I had
responsibility for maintaining a
sound system of internal control
that supported the achievement
of the LSC’s policies, aims and
objectives while safeguarding
the public funds and Council
assets for which I was personally
responsible, in accordance with the
responsibilities assigned to me in
Managing Public Money.
2. The LSC was abolished on
31 March 2010. The responsibility
for the 2009–10 Annual Report
and Accounts was designated to
me in my role as Chief Executive
of Skills Funding, within BIS. In
signing this statement I therefore
have direct knowledge of the LSC’s
control environment.
3. The LSC was an NDPB established
by the Learning and Skills Act
2000. The National Council
consisted of between 12 and
16 members, one of whom was
appointed as the Chairman. They
met regularly with me and with
my senior Management Group
to provide strategic guidance and
oversight. As Chief Executive I was
a member of the National Council.
Schemes existed for delegation
of authority from the National
Council to me and in turn from
me to the Management Group.
4. From 5 June 2009, DIUS merged
with the Department for Business,
Enterprise and Regulatory
Reform (BERR) to create BIS. The
sponsorship of the LSC hence
transferred from DIUS to BIS,
and appropriate communication
channels were put in place to
ensure that BIS was informed of
the business of the LSC, and that
we in turn were informed of the
department’s requirements of the
LSC. DCSF also provided significant
funding for the LSC and retained
an interest in the LSC through a
financial memorandum, regular
dialogue and observation, along
with BIS officials, of National
Council meetings.
5. The National Council, through
its Audit Committee and during
Council meetings, was informed
of the risks facing the LSC and the
LSC’s processes for dealing with
those risks.
The purpose of
the system of
internal control
6. The system of internal control
was designed to manage risk to
a reasonable level rather than
to eliminate all risk of failure
to achieve policies, aims and
objectives. It could therefore
provide only reasonable and
not absolute assurance of
effectiveness. The system of
internal control was based on
an ongoing process designed to
identify and prioritise the risks
to the achievement of the LSC’s
policies, aims and objectives, to
evaluate the likelihood of those
risks being realised and the
impact should they be realised,
and to manage them efficiently,
effectively and economically.
Systems of internal control were
in place in the LSC for the year
ended 31 March 2010. From
1 April 2010, residual actions
undertaken to complete and
provide assurance to support the
Annual Report and Accounts took
place within the Skills Funding
Agency controls framework.
Both systems of internal control
accorded with Treasury guidance.
The risk context
for the LSC
7. The LSC was one of the biggest
NDPBs in the UK, funding and
regulating all education and
training in England from the age
of 16 other than in universities. It
paid out over £1 billion per month
to millions of customers directly
and via thousands of suppliers.
It was responsible for the quality
of provision and collecting data
to report progress in meeting
the targets set by government.
Hence it played a crucial role in
education and skills in England,
and any significant failure in its
mainstream operations could have
been catastrophic in its effect.
Leadership and Governance
LSC Annual Report and Accounts 2009–10 33