Corporate report

Minutes of the Audit Risk Assurance Committee: 16 January 2024

Updated 26 November 2024

Applies to England

Present

Laura Wyld, Chair

Jon Yates, Board member

Ian Looker, Co-opted member

Also in attendance

Martyn Oliver, His Majesty’s Chief Inspector (HMCI)

Matthew Coffey, Deputy His Majesty’s Chief Inspector

Louise Grainger, Director, Finance, Planning and Commercial

Private Secretary to HMCI and Head of Private Office and Corporate Governance

Board Secretary

Corporate Governance Officer

Khadija Qidwai, National Audit Office (NAO)

Sebastian Groth, NAO

Robert Garnett, EY

Tony Smith, Government Internal Audit Agency (GIAA)

Ivan Cheary, GIAA

Phil Byrne, GIAA

Status

Approved at the Audit and Risk Assurance Committee (ARAC) meeting 20 March 2024.

1. Chair’s introduction, declarations of interest, minutes, actions and matters arising

Apologies were received from Martin Spencer and Jo Moran.

The minutes of the last meeting were approved as a correct record.

2. Verbal report from HMCI and Deputy HMCI

HMCI was welcomed to his first ARAC meeting. He gave an update on the programme for his first 100 days and plans for the Big Listen. As an immediate priority, HMCI’s focus has been on Ofsted’s response to the coroner’s findings. The board agreed to delegate final response to the coroner’s recommendations to the chair, senior board member and HMCI.

3. External audit – audit planning update

The committee welcomed Khadija Qidwai the new NAO engagement Director for Ofsted.

A letter of understanding will be issued to HMCI. The purpose of this letter is to set out the basis on which the Comptroller and Auditor General (C&AG) audits the financial statements of Ofsted; and the respective responsibilities of HMCI as Accounting Officer, and the NAO, acting on behalf of the C&AG.

Action: NAO to issue a letter of understanding which will also be shared with ARAC.

Preparations are under way for the interim audit which will begin in February. The final audit will begin in May and completed by June. NAO thanked Ofsted’s finance team for being prompt with quality responses.

There will be an increase in the audit fee this year.

Action: NAO to provide the rationale for the increase.

4. External audit-value for money and insight work

The committee noted the NAO value for money update report.

5. Progress against audit recommendations

The committee reviewed the progress made on implementing audit recommendations. At the end of November, 3 actions are on track for completion by their target dates.

6. Internal audit progress report

GIAA are on track with plans to deliver the full programme by March. Some work originally scheduled for the March ARAC have been brought forward to retain a balance in the number of reports presented at the January and March ARAC meetings.

7. Issued internal audit reports

Four engagements have been completed since the last ARAC meeting. Substantial assurance was provided in respect of the vulnerabilities management audit with no recommendations. The audit found that Ofsted’s system monitoring processes and approach to vulnerability detection are strong.

Substantial assurance was provided in respect of the core financial controls audit with annual testing confirming that most controls are adequate and effective across all areas reviewed. Moderate assurance was provided in respect of the commercial assurance audit.

To aid the review of future audits, the committee suggested a briefing on the scope and coverage of audits would be helpful to aid their understanding and improve oversight.

All 8 medium priority agreed actions from 4 audit reports (Safeguarding Group; Business Continuity Planning; HR Assurance Strategy and Insights and Research: Governance and Stakeholder Engagement) were followed up and all had been adequately implemented.

The committee noted and welcomed the change to the format of audit reports following feedback from ARAC.

HMCI recommended that future audits consider targeted and ranked risks, for example, a high-risk area with a substantial opinion provides greater assurance than a low-risk area with substantial opinion.

8. Internal audit planning update 2024-25

ARAC members were invited to comment on a list of potential audit topics for 2024-2025 emerging from planning discussions with directors. GIAA recognise that there is a huge amount of change in the organisation that may influence the final plan.

GIAA will meet with HMCI to agree the key priority areas and will take a refined plan to the March ARAC for agreement. HMCI highlighted the importance of including a regional focus in future audits to take account of the 8 regional Ofsted bases. Assurance mapping was also highlighted as effective in providing assurance to the committee where internal audit may not always be the most appropriate tool.

9. Interim governance statement 2023-24

The committee reviewed the interim governance statement and requested that the section on board effectiveness is reworded. Subject to this amendment, the committee was content with the statement.

10. Finance report

The committee noted Ofsted’s financial position as of the end of period 8.

ARAC will be briefed on the 2024-25 budget at the March committee meeting.

11. ARAC effectiveness action plan

The committee approved the committee effectiveness action plan.

12. Strategic risk

ARAC noted that the strategic risk register will need to be reviewed and updated to reflect the current context to ensure it aligns with immediate priorities and captures the most significant risks and mitigations.

13. AOB

There was no other business.