Minutes of the Twelfth Meeting of the Resources Committee of the City of Sunderland College held at 3.30pm on Tuesday 29 November 2011 in Room 614 at the Shiney Row Campus

PRESENT: Mr A Carter, Mr R Edmonds, Mr I Forster (Chairman), Mrs A Lawson-McLean, Ms A O’Donoghue, Mr M Ridley.

IN ATTENDANCE: Mr D Howells, Ms S Duncan, Mrs J Ridley, Ms K Bland (inattendance for item R/11/55), Ms S Wallis (in attendance for item R/11/56).

CLERK: Mr C Crossman.

R/11/69 APOLOGIES FOR ABSENCE

Apologies for absence were received from and Ms S Atkinson.

R/11/70 MINUTES OF THE PREVIOUS MEETING OF 4 OCTOBER 2011

The minutes were accepted as an accurate record.

R/11/71 MATTERS ARISING THEREFROM

There were none.

R/11/72 SHARED SERVICES UPDATE

Confidential

The Committee agreed to deem the report confidential from public scrutiny as it contains commercially sensitive information.

K Bland left the meeting at 4.10pm

R/11/73 PARTNERSHIP ARRANGEMENTS TERMLY REPORT

Confidential

The Committee agreed to deem the report confidential from public scrutiny as it contains commercially sensitive information.

S Wallis left the meeting at 4.25pm

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R/11/74 AUDIT HIGHLIGHTS AND MANAGEMENT LETTER

The Vice Principal Finance presented the report drawing the Committees attention to the key issues arising from the KPMG audit of the College’s financial statements and ILR funding audit.

2 points had been raised in the Management letter; one medium risk (clarifying the Gifts and Hospitality Policy to take account of International Business) and one low risk (Memorandum of Understanding to be put in place for a College company). Agreed target dates for these points to be addressed were in place.

The Vice Principal reported that the ILR audit was not a requirement, but the College had asked KPMG to do the work in most years because of the implications of the data for funding. Some issues been identified within the College’s ILR data relating to data quality which had since been corrected. There were no adjustments to the accounts and no funding implications. The College did have further monitoring controls in place which would act as a safety net and identify any errors at the year end prior to the funding claim being submitted to the SFA.

The Vice Principal Finance explained that this had been the subject of lengthy discussion at the Audit Committee. Members had queried the findings in relation to issues regarding ALS claims which had previously been raised as part of the 2008-09 report. It was confirmed that whilst it related to the same area, the issues raised were different.

It was noted that the Audit Committee requested that the Vice Principal Finance provide the Committee with an update on the implementation of the recommendations outlined in the action plan and report on any risks, lessons learned and any additional controls which may be required. In addition, the College had requested that KPMG undertake a follow up visit to ensure that the issues have been addressed. The overall finding of KPMG on the ILR audit was Good/Satisfactory and the Audit Committee had been advised by KPMG that this is the second highest level of assurance, and in the nature of proceeses connected with the ILR, they had never given any College a higher rating.

The Chair asked if there was a capacity problem following a period of significant organisational change. It was noted that the issue was about a large number of people involved in processing large amounts of data; management would remind staff of the importance of ensuring that everyone was following the correct procedures. A training day had been put in place for December.

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The Committee:

i. received the Audit Highlights and Management Letter;ii. agreed to recommend the report to the Board for approval.

R/11/75 CHARGES TO BLUE SQUARE TRADING ANNUAL REPORT

The Committee:

Received the annual report on the charges to Blue Square.

R/11/76 DRAFT ANNUAL REPORT AND FINANCIAL STATEMENTS

The Vice Principal Finance presented the report outlining the key points detailed in sections 2 and 3 of the report.

Governors asked a number of questions and the following points were noted: The College was expecting some reductions in 16-19 and adult funding.

It would need to grow other areas such as International in-country delivery and sub-contracting in order to manage the impact

The planned contingency and surplus would enable the College to proceed with its Estates Strategy. Management were confident that the new strategic target of a 5% surplus would be achieved.

It was felt that if the unemployment rate for young people continued to rise, Government funding may become available to address the issue.

The Committee:

i. received the draft report and financial statements for 2010/11;ii. recommended the report and financial statements to the Corporation

for its approval without amendment;iii. noted the financial position of Blue Square trading Limited and City of

Sunderland College Supples Limited and agreed, in the general interests of the College, to provide financial and other support to enable them to continue to trade;

iv. agreed to provide KPMG with a management representations letter confirming general and specific matters in line with International Standards on Auditing.

R/11/77 BUDGETARY CONTROL STATEMENTS

The Vice Principal Finance presented the budgetary control statements for the twelve months to July 2011. He explained that this was an early report in terms of the financial year and that a budget update exercise was

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currently being undertaken. A budget update report would be brought to the Committee’s next meeting in January.

The Committee:

received the report.

R/11/78 IT UPDATE

Confidential

It was agreed that the report and its minute should remain confidential at this stage.

R/11/79 ESTATES UPDATE

Confidential

It was agreed that the report and its minute should remain confidential at this stage.

R/11/80 ANNUAL REPORT ON TREASURY MANAGEMENT

The Vice Principal Finance presented the annual report on Treasury Management. He explained that the College’s financial regulations state that “the College will only invest surplus funds with banks and building societies with an S&P credit rating of AA or better”. It was noted that the credit ratings of the main banking institutions had been downgraded recently and were under constant review. The Vice Principal confirmed that the College had made required repayments on all borrowing, there had been no breaches of loan covenants and that he saw no reason to change its Banking arrangements.

It was noted that the Vice Principal Finance was reviewing the Financial Regulations and would bring the revised version to the Committee in the spring term.

The Committee:

noted the report and agreed to waive the requirement within the Financial Regulations so that the College could continue to invest in major banking institutions classified at least A+ with Standard and Poors and A1 by Moodys in light of the downgrading of credit ratings of those institutions.

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R/11/81 HEALTH & WELBEING GROUP MINUTES

In response to a question from a Governor it was clarified that lone working issues related to staff working on the premises of other employers.

The Committee:

received the minutes noting the issues considered by the Health & Wellbeing Group.

R/11/82 ANY OTHER BUSINESS

There was none.

R/11/83 DATE, TIME AND VENUE OF NEXT MEETING

The next meeting will take place on Tuesday 17 January 2012 at 3.30pm in Room 614, Shiney Row Centre.

The meeting closed at 5.35pm.

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