The North / South Language Body Annual Report & Accounts 2009

The then Chief Executive Officer, the Director of Corporate Services and the Finance and AdministrationManager attended a Risk Management course in 2007 and they all achieved the CIPFA Risk ManagementFoundation level qualification. There was no Audit Committee in place in late 2009 due to the resignation of thechair and one other member of the Audit Committee. The Audit Committee was subsequently reconstituted inFebruary 2010.The Risk and Control FrameworkThe Agency operates risk management as a live process and there is action to improve controls and reduceresidual risks. Risk is reviewed when circumstances change, or when new risks are identified, such as whenplanning the implementation of a new process.The Agency has an Internal Audit Service provided by an external company, which operates to standardsdefined in the Government Internal Audit Manual. The Internal Audit service submitted regular reports during2009 together with recommendations for improvement. Two of the areas examined were Grants Processing andPurchasing and Procurement. Grants Processing was given a Limited Assurance rating in June 2009 this wasreviewed again in Jan 2010 and was given a satisfactory rating. Procurement and Purchasing was given aLimited Assurance in May 2009 this was reviewed again in Jan 2010 and was given a Satisfactory rating.The Agency’s financial reporting processes were improved in 2009 with the introduction of a new accountingsoftware package with an integrated payroll system. This system enables monthly expenditure reports to beproduced for consideration by the Board and senior management and for reporting to Sponsor Departments andthe North South Ministerial Council. Also in June 2009 the Agency installed a new grants database to facilitateimproved management and recording of grants approved under the Financial Assistance Scheme.Review of EffectivenessAs Accountable Person, I have responsibility for reviewing the effectiveness of the system of internal control.My review of the effectiveness of the system of internal control is informed by the work of the internal auditors,the Audit Committee and Executive managers within the Agency who have responsibility for the developmentand maintenance of the internal control framework, and comments made by the external auditors in theirmanagement letter and other reports. A plan to address weaknesses and ensure continuous improvement of thesystem is in place and is reviewed regularly through the Audit recommendations matrix.Significant Internal Control WeaknessesOverall, Internal Audit provided satisfactory assurance in 2009 on the systems of internal control whichrepresents a significant improvement. Management has accepted the recommendations made by Internal Auditin relation to improving the systems of internal control in the areas reviewed i.e. Grants Processing, Purchasing& Procurement, Bank/Cash Management and Risk Management and are committed to ensuring improvementsin these areas; some improvements are still required to enhance the adequacy and/or effectiveness of riskmanagement, control and governance. The following issues have been highlighted as requiring attention:• Further documentation of operating procedures and staff guidance on protocols and procedures;• Performance reporting and monitoring of core funded groups;• Further embedding of procurement policies within the culture of the organisation;• The preparation of business cases to support investment decisions;• Number of required Audit Committee meetings not met;• Lack of physical control over assets;• Inadequate record keeping.38