No 6450
Wednesday 11 January 2017
Vol cxlvii No 16
pp. 288–310
17 January, Tuesday. Full Term begins.
24 January, Tuesday. Discussion at 2 p.m. in the Senate-House (see below). End of first quarter of Lent Term.
28 January, Saturday. Congregation of the Regent House at 2 p.m.
29 January, Sunday. Preacher before the University at 11.15 a.m., The Rev’d Dr Susan Durber, Minister of the United Reformed Church, Taunton and Moderator of the Faith and Order Commission of the World Council of Churches, formerly Principal of Westminster College, Cambridge.
|
Discussions (at 2 p.m.) |
Congregations |
|
24 January |
28 January |
|
7 February |
25 February |
|
21 February |
25 March |
|
7 March |
1 April |
|
21 March |
The Vice-Chancellor invites those qualified under the regulations for Discussions (Statutes and Ordinances, p. 103) to attend a Discussion in the Senate-House on Tuesday, 24 January 2017, at 2 p.m. for the discussion of:
1. Annual Report of the Council for the academical year 2015–16, dated 21 November 2016 (Reporter, 6448, 2016–17, p. 202).
2. Annual Report of the General Board to the Council for the academical year 2015–16, dated 2 November 2016 (Reporter, 6448, 2016–17, p. 215).
3. Reports and Financial Statements for the year ended 31 July 2016 (Reporter, 6448, 2016–17, p. 221).
4. Report of the Council, dated 9 January 2017, on the provision of additional hockey and changing facilities at the Wilberforce Road Sports Ground (p. 306).
The Vice-Chancellor gives notice that, under the provisions of Regulation 6 of the regulations for Graces and Congregations of the Regent House (Statutes and Ordinances, p. 103), he has withdrawn Grace 1 submitted to the Regent House on 14 December 2016 (Reporter, 6449, 2016–17, p. 283) concerning the handling of student complaints of harassment and sexual misconduct for further consideration.
The Vice-Chancellor wishes to remind members of the University of the days in 2017 appointed by regulation for the wearing of festal gowns by Doctors (which are also the days on which the academical dress of other universities may in general be worn). Under this regulation he is also designating 21 June (Congregation for Honorary Degrees) as an additional ‘Scarlet day’ in 2017.
|
16 April |
Easter Day |
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25 May |
Ascension Day |
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4 June |
Whitsunday |
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11 June |
Trinity Sunday |
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21 June |
Honorary Degrees |
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28, 29, 30 June, and 1 July |
General Admission to Degrees |
|
1 November |
All Saints’ Day |
|
5 November |
Commemoration of Benefactors |
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25 December |
Christmas Day |
Published for information are the days when the University Flag will usually be flown:
|
6 February |
Accession of HM The Queen |
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21 April |
Birthday of HM The Queen |
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23 April |
St George’s Day |
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10 June |
Birthday of HRH The Duke of Edinburgh |
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17 June |
Official Birthday of HM The Queen |
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14 November |
Birthday of HRH The Prince of Wales |
The University Flag will also be flown on all Congregation days, including 2 October (Admission of the Vice-Chancellor and Election and Admission of the Proctors), 21 June (Honorary Degrees), and General Admission to Degrees.
The following Notice provides information about elections to fill vacancies on the Board of Scrutiny and on the Nominating Committee for External Members of the Council.
The Vice-Chancellor gives notice of an election to a casual vacancy on the Board of Scrutiny in the following class under Statute A VII, following the election of Dr David Secher as a member of the Finance Committee:
(c)(ii) (a member of the Regent House), to serve with immediate effect until 30 September 2019.
The Board of Scrutiny consists of:
(a)the Proctors;
(b)the two Pro-Proctors nominated by the Colleges;
(c)eight members of the Regent House elected by the Regent House.
Under the provisions of Statute A VII 4, no person may be a member of the Board of Scrutiny who is a member of the Council, the General Board, or the Finance Committee of the Council, or who holds any of the University offices of Chancellor, Vice-Chancellor, Pro-Vice-Chancellor, University Advocate, Deputy University Advocate, Registrary, Assistant Registrary, or Secretary of a School. The Statute further prohibits from membership holders of offices with primarily administrative duties designated by Ordinance: Directors and Deputy Directors in the Unified Administrative Service and Assistant Treasurers have been designated as such prohibited offices. A retiring member of the Board who has served for four or more consecutive years is not eligible to serve again as a member in class (c) until one year has elapsed after the end of her or his previous period of service.
If no nominations are received in accordance with the timetable below, the Council shall be asked whether it wishes to appoint a member to the vacant place or for another election to be held, in accordance with Regulation 3 of the regulations for the election of members of the Board (Statutes and Ordinances, p. 112).
Further information about the Board of Scrutiny can be found in the Statutes and Ordinances as noted above, on the Board’s website (http://www.scrutiny.cam.ac.uk/), and obtained from Dr Lydia Drumright (email: lnd23@cam.ac.uk), Chair of the Board.
The Vice-Chancellor gives notice of an election to a casual vacancy on the Nominating Committee in the following class, following the election of Dr Stephen Cowley as a member of the Council:
(d)(a member of the Senate elected by the Regent House), to serve with immediate effect until 30 September 2019.
No person may be a member of the Committee in class (d) who is a member of the Council or who holds any of the University offices of Pro-Vice-Chancellor, Registrary, or Director or Deputy Director in the University Offices.
Further information about the Committee can be found in the Statutes and Ordinances (p. 111) and obtained from the Acting Registrary (email: registrary@admin.cam.ac.uk).
The nomination procedure and election timetable for the elections is as follows.
In order to be eligible, a candidate for election must be nominated on a paper sent to the Vice-Chancellor at the Old Schools so as to be received not later than 12 noon on Friday, 27 January 2017. The nomination paper must contain (a) a statement signed by two members of the Regent House, nominating the candidate for election and specifying the body and the class to which he or she is nominated, and (b) a statement signed by the candidate certifying that he or she consents to be so nominated. The candidate is also required to provide a statement of her or his curriculum vitae by the same date (see below).
The Vice-Chancellor would be obliged if nominations could be delivered to the Acting Registrary in the Old Schools during office hours. Documents which are submitted by fax to 01223 (3)32332 or scanned documents containing a signature or signatures sent to the Acting Registrary at Registrary@admin.cam.ac.uk will also be accepted. Nominations will be published on the Senate-House Noticeboard as they are received; the complete list of nominations will be published in the Reporter on Wednesday, 1 February 2017.
In accordance with the regulations governing the elections (Statutes and Ordinances, p. 110), each person nominated for election is required to send to the Acting Registrary, not later than 12 noon on Friday, 27 January 2017, a statement of her or his curriculum vitae for distribution to members of the Regent House with the voting papers. It is suggested that such a statement should be of not more than 500 words in length, and that it should cover the following points:
•the candidate’s present position in the University;
•previous posts held, whether in Cambridge or in other universities or outside the university system, with dates;
•a note of the candidate’s particular interests within the field of University business.
If more than one nomination is received for each vacancy by the deadline, an election will be conducted by ballot under the Single Transferable Vote regulations. Online voting will open at 10 a.m. on Monday, 6 February 2017 and close at 5 p.m. on Thursday, 16 February 2017. Hard-copy voting papers and supporting materials will be distributed not later than Monday, 6 February 2017 to those who opted by 3 November 2016 to vote on paper; the last date for the return of voting papers will be 5 p.m. on Thursday, 16 February 2017.
The Council has considered the remarks made at the Discussion on 22 November 2016 (Reporter, 6446, 2016–17, p. 164) concerning the following topic of concern (Reporter, 6441, 2016–17, p. 64):
That the Regent House, as the governing body of the University, consider the report of the ACBELA Working Group on Investment Responsibility published in June 2016,1 and in particular consider a policy of divestment from fossil fuels.
The Council acknowledges the consensus among speakers on the acceptance of the evidence of global warming and the urgent requirement to take action to mitigate the effects of climate change, as well as a widespread appreciation of the need to find alternatives to fossil fuels. However, the Council notes that there was a range of views as to the steps that ought to be taken on behalf of the University in relation to its investment policy.
Members of the Council recognize their continuing fiduciary responsibility as trustees to ensure that environmental, social, and governance (ESG) factors are properly and appropriately taken into account in the University’s approach to its investment policy. For that reason, in May 2015 the Council endorsed the establishment of a working group of the Advisory Committee on Benefactions and External and Legal Affairs (ACBELA) to consider whether any changes to the University’s Statement of Investment Responsibility should be recommended, taking into account the integration of ESG considerations into investment practice, the mission and core values of the University, and the relevance, performance, and scope of potential investment approaches and asset allocation strategies.
Over a twelve-month period, the working group reviewed a wide range of evidence and opinion, including, as noted in Schedule 2 of the working group’s report, an extensive paper submitted by the Zero Carbon Society. Following careful deliberation, the working group determined not to advocate the adoption of a mandatory policy of divestment but instead recommended in its report a range of actions intended to expand the alignment of the University’s expectations in respect of ESG factors and its investment practices. The report included a recommendation that attention be paid to investments across asset classes that focus on ESG considerations, when financially equivalent to current holdings. The report also highlighted the sustainability and environmental initiatives which the University actively carries out through its teaching, education, and research.
At its meeting in June 2016 the Council debated the working group’s report in detail, including the option of taking a more interventionist stance than that proposed by the group, in particular concerning investment in fossil fuels. Following that discussion, Council members were not as a body convinced that the interests of the University would be best served by mandating divestment from extraction industries and, noting that in any event the University had no direct or indirect holdings in tar sands companies, and its indirect exposure to thermal coal companies was negligible, voted unanimously to endorse the recommendations of the working group’s report. Going forward, it is the Council’s intention to commission a report into the advantages and disadvantages of a policy of divestment.
The Council takes this opportunity to remind members of the Regent House that ACBELA, as a sub-committee of the Council, is responsible for keeping the University’s policy on investment responsibility under regular review and that, as highlighted in the working group’s report, there is an existing route for raising any matters of concern relating to the application of the policy by addressing such concerns to the Registrary.
The Council has received and considered the following Grace which has been initiated under Special Ordinance A (i) 5 by 140 members of the Regent House:
‘That the Regent House, as the governing body of the University, resolves that none of the University’s Endowment Funds should be invested directly or indirectly in companies whose business is wholly or substantially concerned with the extraction of fossil fuels, and requires the Council to publish a Report to the University within twelve months setting out how this is to be achieved.’
A list of the signatories is set out in Annex A.
The Council has agreed to authorize the submission of the Grace to the Regent House (Grace 1, p. 307). In adopting this course, the members of Council are mindful that the Grace cannot operate as a mandate in respect of the exercise of their fiduciary responsibility for the University’s investment practices. However, they recognize the strong feeling amongst those who have signed the Grace and they propose to respond by commissioning a report specifically into the advantages and disadvantages of the policy of divestment which the Grace supports, to be completed in so far as possible in line with the timescale envisaged in the Grace. The Council will keep the Regent House informed as to the terms of reference and membership of the body tasked with preparing the report and as to the exact timetable for delivery of the report, which will be made available to the Regent House.
|
R. H. Abbott |
J. L. Gibson |
E. E. Mawdsley |
|
A. Aguilar Salgado |
M. E. Glendenning |
L. G. Mellor |
|
C. Alaghband-Zadeh |
A. Gonzalez Cabrera Honorio Serrenho |
S. C. Mentchen |
|
R. A. Alexander |
J. P. M. Gosling |
T. G. Micklem |
|
T. Alexopoulou |
W. T. Gowers |
I. Möller |
|
A. H. Amin |
A. M. Grant |
A. W. Moore |
|
W. Amos |
C. D. Gray |
R. Morieux |
|
H. Azérad |
P. M. Gray |
N. I. Mundy |
|
P. Badakhchani |
J. T. A. Greatorex |
J. M. Munns |
|
A. P. Balmford |
B. B. Groisman |
D. P. Nally |
|
J. R. Bavidge |
Z. R. Groves |
M. Nikolajeva |
|
E. C. Blair |
J. A. Guarneri |
K. Ottewell |
|
C. Brassett |
J. D. Guthrie |
K. Patel |
|
M. T. Bravo |
N. S. M. Guyatt |
H. Pfeifer |
|
B. J. Burchell |
R. Haynes |
S. A. Radcliffe |
|
G. L. Burgess |
R. J. E. Higham |
N. Radic |
|
J. L. Caddick |
S. J. Hogarth |
Alice M. Reid |
|
M. T. Calaresu |
R. E. Holmes |
P. G. M. Richardson |
|
H. A. Chalmers |
N. D. Hopwood |
S. L. Robertson |
|
M. C. Chiodo |
M. Hrebeniak |
M. A. Ruehl |
|
S. T. Clark |
M. Iacovou |
M. J. Rutter |
|
R. M. Coleman |
J. M. Jacobs |
C. G. Sandbrook |
|
P. J. Connell |
A. S. Jeffrey |
J. L. Scott |
|
R. C. Coulter |
C. D. Jiggins |
J. E. Scott-Warren |
|
J. A. Crowcroft |
A. P. Judson |
A. C. H. Skelton |
|
H. A. Curry |
A. J. Kabla |
J. Sloan |
|
L. M. Delap |
S. R. Kell |
Z. Sobral Mourao |
|
J. J. Depledge |
R. M. Kilner |
A. Sriprakash |
|
B. J. Doody |
L. P. King |
B. Steger |
|
K. L. Dow |
D. D. Konadu |
W. J. Sutherland |
|
A. C. B. Drury |
A. Künzl-Snodgrass |
Z. A. M. Svendsen |
|
G. C. M. Dufour |
M. E. de L. Lamb |
S. R. S. Szreter |
|
F. E. Duncan |
C. S. Lane |
E. V. Tanner |
|
R. N. Duschinsky |
J. A. Langley |
P. N. Taylor |
|
L.-A. U. Duvic-Paoli |
M. R. Laven |
W. P. Van Pelt |
|
M. Eilstrup-Sangiovanni |
N. Leader-Williams |
J. M. B. Wallace |
|
A. Ercole |
C. L. Lemanski |
E. Watson |
|
E. Evenhuis |
Y. Liu |
S. Watson |
|
A. J. Fauverge |
M. V. Lucas-Smith |
J. F. W. Weitzdoerfer |
|
C. J. B. Ford |
R. C. Lupton |
N. J. Widdows |
|
W. A. Foster |
R. T. R. Lyne |
R. D. Williams |
|
S. Fransen |
T. G. McAuley |
J. L. Wong |
|
N. M. Furey |
R. G. Macfarlane |
J. Woodhouse |
|
C. Gagne |
I. McNeill |
W. Yaqoob |
|
M. Gandy |
E. E. McPherson |
C. Zähner |
|
R. Garcia Mayoral |
W. J. Matthews |
L. K. Zeitler |
|
M. W. Gehring |
J. Zink |
The Department for Education has launched a consultation on registration fees that registered higher education providers will pay to the Office for Students (OfS). In addition to the consultation on the calculation of the registration fee, views are also being sought on examples of situations in which the OfS could use its power to charge other fees, and how government funding to the OfS could work. Further information is available online at https://www.gov.uk/government/consultations/office-for-students-registration-fees-for-he-providers.
The Council welcomes comments by 5 p.m. on Friday, 3 February 2017 so that these can be taken into account in drafting a response on behalf of the University. Responses can be provided by email to the Head of the Registrary’s Office: head-ro@admin.cam.ac.uk.
The Council by Notice on 18 March 2015 informed the University of its intention to sell the University of Cambridge Dental Practice (Reporter, 6380, 2014–15, p. 428).
The Practice was sold on 22 December 2016. The new owners and managers are committed to providing continuity of treatment to patients currently under the care of the Practice and welcome new patients. The Practice continues at the 3 Trumpington Street premises and the new telephone number is 01223 367870.
The Council has received the Annual Report of the Audit Committee for 2015–16. The report is published for the information of the University. Appendices B–E are available at http://www.admin.cam.ac.uk/reporter/2016-17/weekly/6450/AuditReport_Appendices_2015-16.pdf.
The Audit Committee is required to submit an annual report to Council, the Vice Chancellor, and subsequently to the Higher Education Funding Council for England (‘HEFCE’). The Audit Committee Annual Report is informed by the internal audit annual report (see Appendix A [not published with this report]).
This report follows the guidance set out in Appendix 6 of HEFCE’s Handbook for Members of Audit Committees in Higher Education Institutions.
This Audit Committee Annual Report is for the financial year 1 August 2015 – 31 July 2016 and includes the opinion of the Audit Committee on the reliance to be placed on the internal control and reporting systems of the University. The opinion is based on the Committee’s consideration of the University’s Risk Register, the internal auditor’s annual report, the external auditor’s Management Letter, other work commissioned by the Committee during the year, and on discussions at its meetings and workshops.
Deloitte LLP are the University’s internal auditors and were reappointed from August 2014.
This report refers only to those final internal audit reports that have been received and considered by the Audit Committee during the financial year under consideration. This will include any reports that were issued in draft during 2014–15, but which were not finalized for the Committee’s consideration until the 2015–16 financial year. This will not include any 2015–16 reports that have been finalized recently by internal audit, but which have not yet been considered by the Audit Committee at one of its meetings.
During 2015–16 and up to the point of writing, the Committee has received and considered 16 internal audit reports. Where a rating was ascribed, 54% of reports were given Substantial or Full assurance.1
PricewaterhouseCoopers LLP were reappointed as the University’s external auditors (see paragraph 7.1).
This section provides the Audit Committee’s opinion on the adequacy and effectiveness of institutional arrangements during 2015–16 and up to the date of this report.
The Audit Committee has monitored and considered the effectiveness of the University’s risk management, control, and governance throughout 2015–16. These arrangements support the University in fulfilling its policies, aims, and objectives, enabling the University to identify, understand, and manage its principal risks, and to be accountable and transparent in its governance. The Committee considers that the University, individual institutions, and subsidiary companies have continued to make clear and sustained efforts to understand, communicate, and incorporate best practice in risk management, governance, and internal controls.
The Committee has agreed that the Statement of Internal Control in the Financial Statements for 2015–16 is an accurate reflection of the risk management, control, and governance arrangements in place. The Committee is satisfied that these arrangements are adequate and effective.
The Committee has monitored the effectiveness of the University’s financial controls, systems, and management structures in place for promoting efficiency, effectiveness, and economy in the use of public funds and other resources.
The Committee has noted the continuing adoption of and improvement in financial procedures and management practices designed to support the achievement of value for money and institutional effectiveness. The Committee is satisfied that these arrangements are appropriate and effective.
The Audit Committee monitors the effectiveness of the University’s management and quality assurance of data submitted to HESA, to HEFCE, and to other funding bodies. Internal audit reviews of various aspects of data management form part of the three-year cycle of audits. An internal audit on data quality in the HESA return has been conducted this year for which substantial assurance was given. The Committee is satisfied that the management control and quality assurance of data submitted are adequate and effective.
The constitution of the Audit Committee is set out in the Statutes and Ordinances of the University of Cambridge (see Appendix B).
|
Chair: |
Mr Mark Lewisohn |
|
Secretary: |
Dr Jonathan Nicholls, Registrary |
|
Assistant Secretary: |
Dr Clara East |
There were a number of membership changes over the course of the year and these are summarized in the table below.
|
Class of membership* |
Name of member |
Limit of tenure |
|
(a) |
Mr Mark Lewisohn |
31 December 2017 |
|
(b) |
Dr Ruth Charles |
31 December 2016 |
|
Dr David Good (until December 2015) |
31 December 2015 |
|
|
Reverend Jeremy Caddick (from January 2016) |
31 December 2018 |
|
|
(c) |
Mr Peter Doyle |
31 December 2018 |
|
Ms Janet Legrand |
31 December 2018 |
|
|
Ms Catherine Spitzer |
31 December 2016 |
|
|
Mr John Aston |
31 December 2016 |
|
|
(d) |
Professor Nigel Slater (until December 2015) |
31 December 2015 |
|
Dr Thomas Keith Carne |
31 December 2016 |
|
|
Professor John Dennis (from June 2016) |
31 December 2016 |
* Class (a): Chair and external member of the Council; class (b): members of Council; class (c): external members; class (d): co-opted members.
Members are appointed to the Audit Committee by the Council of the University of Cambridge. Membership nominations are made to the University’s Council’s Advisory Committee on Committee Memberships and External Nominations, except in the case of class (d) members who are co-opted by the Committee on the basis of recommendations received.
The Audit Committee invites certain senior university officers and the University’s external and internal auditors to attend unreserved meetings. It may also invite other colleagues and external speakers to attend for a specific agenda item or to present on a particular area of risk. The Audit Committee also invites the Chair of each of the audit committees of Cambridge Assessment and Cambridge University Press to attend all meetings and to make biannual reports.
The Vice-Chancellor is invited to address the Audit Committee annually.
|
Position |
Name |
|
Director of Finance |
Mr Andrew Reid |
|
Senior Pro-Vice-Chancellor (Planning and Resources) |
Professor Duncan Maskell |
|
Internal Auditor – Deloitte LLP |
Ms Kirsty Searles Mr Jonathan Gooding Mr Richard Neal |
|
External Auditor – PricewaterhouseCoopers LLP |
Mr Charles Joseland Mr Simon Ormiston Mr Stephen Wyborn Mr David Savage |
|
Deputy Head of Legal Services |
Mr David Parsons |
|
Director of International Strategy |
Dr Toby Wilkinson |
|
Managing Director, BAE Systems Applied Intelligence |
Mr Kevin Taylor |
|
Director of University Information Services |
Dr Martin Bellamy |
|
Head of the University Research Office |
Dr Peter Hedges |
|
Assistant Director, Research Office |
Dr Jo Dekkers |
|
Quality Assurance and Compliance Manager |
Ms Sara Hajnassiri |
|
Pro-Vice-Chancellor (Education) |
Professor Graham Virgo |
|
Academic Secretary |
Ms Emma Rampton |
|
Head of Graduate Student Administration |
Ms Kerri Gardiner |
|
External Consultant, JCA Group |
Ms Alice Perkins |
|
Director of Estates Strategy |
Dr Jason Matthews |
|
Joint Head of Legal Services |
Ms Helen Jackson |
|
Director of Health, Safety, and Regulated Facilities |
Dr Martin Vinnell |
|
Chair of the Audit Committee of Cambridge Assessment |
Mr Bruce Picking |
|
Chair of the Audit Committee of Cambridge University Press |
Mr Nick Temple |
The table below provides information on meeting dates and attendance.
|
Date |
Members and associated class |
Senior officers and guests |
Auditors |
Apologies2 |
Quorate |
|||
|
(a) |
(b) |
(c) |
(d) |
|||||
|
08/10/15 |
1 |
1 |
2 |
2 |
6 |
Internal: 3 |
5 |
Partial3 |
|
19/11/15 |
1 |
1 |
4 |
1 |
4 |
Internal: 2 External: 3 |
3 |
Yes |
|
14/01/164 |
1 |
2 |
3 |
1 |
7 |
Internal: 3 External: 1 |
3 |
Yes |
|
10/03/16 |
1 |
2 |
3 |
1 |
7 |
Internal: 3 External: 2 |
3 |
Yes |
|
05/05/16 |
1 |
2 |
3 |
1 |
7 |
Internal: 3 |
2 |
Yes |
|
30/06/16 |
1 |
2 |
4 |
2 |
8 |
Internal: 2 |
1 |
Yes |
The Audit Committee’s terms of reference are set out in Statutes and Ordinances of the University of Cambridge. It is the duty of the Audit Committee:
(a)to keep under review the effectiveness of the University’s internal systems of financial and other control;
(b)to advise the Council on matters relating to the external and internal auditors including their appointment, the provision by the auditors of any additional services outside the scope of their regular responsibilities, the remuneration of the auditors, and any questions relating to the resignation or dismissal of auditors;
(c)to ensure that sufficient resources are made available for internal audit;
(d)to approve proposals for internal audit put forward by the internal auditors;
(e)to review annually with the external auditors the nature and scope of the external audit;
(f)to consider any reports submitted by the auditors, both external and internal;
(g)to monitor the implementation of any recommendations made by the internal auditors;
(h)to satisfy themselves that satisfactory arrangements are adopted throughout the University for promoting economy, efficiency, effectiveness, and risk management;
(i)to establish appropriate performance measures and to monitor annually the performance and effectiveness of the external and internal auditors;
(j)to consider, in consultation with the external auditors, (i) any financial statements annexed to the abstract of accounts, including the auditors’ report, and (ii) any statement provided by the Council on the governance of the University;
(k)to ensure that all significant losses are properly investigated and that the internal and external auditors, and where appropriate the Higher Education Funding Council for England, are informed;
(l)to oversee the University’s policy on fraud and irregularity, and to ensure that they are informed of any action taken under that policy;
(m)to make an annual report to the Council, the Vice-Chancellor, and the Higher Education Funding Council for England;
(n)to receive reports from the National Audit Office and the Higher Education Funding Council for England, and to advise the Council thereon;
(o)to forward minutes of their meetings to the Council.
Deloitte LLP were reappointed as internal auditors for the University with effect from 1 August 2014 until 31 July 2017.
The performance of the internal auditors and their lead partner is considered annually by the Committee.
The annual report for the period 1 August 2015 to 31 July 2016 was received by the Audit Committee at its meeting of 6 October 2016 (see Appendix A [not published with this Report]). Subject to the limitations of the work described in Deloitte LLP’s report, the internal audit opinion given was as follows:
‘We provide reasonable assurance that the University has an adequate and effective system of risk management, control and governance, and considers economy, efficiency, and effectiveness in its systems and processes for the year ended 31 July 2016. The control issues identified during our work do not materially impact upon the assurance statement provided.’
Internal audit plans are prepared annually on the basis of ranked risks and ownership, as set out in the University’s key risk register, and key issues identified in interviews with a selection of Committee members and senior officers. Different teams of auditors are assigned to undertake the work depending on the level of specialism required.
Audits are themed by function and involve visits to a range of Departments and institutions. Fact-finding reports are commissioned where particular situations warrant further investigation. Departmental audit is primarily covered by the annual departmental self-assurance survey. The survey addresses all areas of the traditional on-site departmental audits. To help validate the findings of the survey the results are followed up by face-to-face meetings and selected on-site testing. The results are shared with Schools to highlight best practices and areas for improvement. Departments with an overall rating of red or amber are given a full breakdown of results.
The Committee considers all reports submitted by the internal auditors. Each internal audit report is assigned to a member of the Committee for detailed consideration. Reports are presented by the internal auditors and feedback and queries are subsequently invited from the member to whom the report had been assigned.
Deloitte LLP provide an assessment of the adequacy and effectiveness of systems using the following definitions:
|
Full |
There is a sound system of internal control designed to achieve the University’s objectives. The control processes tested are being consistently applied. |
|
Substantial |
While there is a basically sound system of internal control, there are weaknesses, which put some of the University’s objectives at risk. There is evidence that the level of non-compliance with some of the control processes may put some of the University’s objectives at risk. |
|
Limited |
Weaknesses in the system of internal controls are such as to put the University’s objectives at risk. The level of non-compliance puts the University’s objectives at risk. |
|
Nil |
Control processes are generally weak leaving the processes/systems open to significant error or abuse. Significant non-compliance with basic control processes leaves the processes/systems open to error or abuse. |
Deloitte LLP classify their recommendations as follows:
|
Priority 1 |
Issues that are fundamental to the University, for the attention of senior management and the audit committee. |
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Priority 2 |
Issues that are fundamental to the area subject to internal audit, for the attention of senior management, and the audit committee. |
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Priority 3 |
Important issues to be addressed by management in their areas of responsibility. |
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Priority 4 |
Housekeeping issues or good practice suggestions. |
Fees paid for work completed in the financial year 2015–16 are shown in Appendix C.
PricewaterhouseCoopers LLP (PwC) were reappointed as external auditors for the University for the financial year 2015–16.
In accordance with HEFCE’s Financial Memorandum an external auditor is appointed or reappointed annually. The Statutes and Ordinances of the University of Cambridge also require that the accounts of the University are audited annually by qualified accountants appointed by Grace on the nomination of the Council.5
At its January 2016 meeting the Committee agreed to recommend to the Council that a Grace be promoted for the re-appointment of PwC as the external auditors for the financial year 2014–15. The recommendation was based on the Committee’s recent positive assessment of PwC (see below) which had led to their reappointment as the University’s external auditors for the next three years.
Market testing of the external auditors is required to be carried out every seven years and appointment/reappointment of external auditors was due in the 2015–16 financial year. A sub-group of the Audit Committee was set up to consider the matter. The group reviewed feedback reports on PwC’s performance from Cambridge University Press and Cambridge Assessment as well as Value for Money benchmarking papers for external audit provision in the HE sector. The group recommended not to proceed to a full retender but to continue with PwC for the next three years. PwC were asked for their proposals to re-fresh and enhance their service and gave a presentation to the Committee at its November 2015 meeting. The Committee subsequently agreed to recommend the reappointment of PwC as the University’s external auditors until 2018.
During 2015–16 the external auditors carried out work in the following areas for the University: tax compliance for a University subsidiary, pensions and tax advice at Cambridge University Press (CUP), an external project administered by Cambridge Institute for Sustainability Leadership; and other minor engagements. In each case the engagement was subject to the Audit Committee’s policy on non-audit services to ensure that the external auditors’ independence was not placed at risk.
The external audit management letter 2015–16 submitted by PricewaterhouseCoopers LLP was received by the Audit Committee at its meeting on 17 November 2016.
The Audit Committee considered the report and was satisfied with the remarks on auditing and accounting matters, detailed control observations, and other observations from around the University group.
Fees paid for work completed in 2015–16 are shown in Appendix D.
The Council is responsible for reviewing the effectiveness of the system of internal control. The Audit Committee supports the Council in this role through the following processes:
(a)The Council receives periodic reports from the Chair of the Audit Committee concerning internal control and receives the minutes of all meetings of the Audit Committee;
(b)The Audit Committee receives regular reports from the internal auditors, which include the internal auditors’ independent opinion on the adequacy and effectiveness of the University’s system of internal control and risk management, together with recommendations for improvement;
(c)The Council’s review of the effectiveness of the system of internal control is informed by the work of the internal auditors. They operate to the standards defined in Accountability and Audit: HEFCE Code of Practice;
(d)The Audit Committee reviews and reports on the implementation of recommendations made and agreed in the regular audit cycle and other investigations.
Through the consideration of reports from the internal auditors and other investigations the Audit Committee is assured that the University’s system of internal control is currently effective and is able to report its reassurance to the Council for the year 2015–16.
Deloitte LLP have confirmed its reasonable assurance that the University has an adequate and effective system of risk management, control, and governance, and considers economy, efficiency, and effectiveness in its systems and processes for the year ended 31 July 2016. They have further confirmed that the control issues identified during their work do not
materially impact upon the assurance statement provided.
The University of Cambridge pursues good practice in risk management as given in the Turnbull Committee guidance and more recent FRC guidance issued in 2014, and endeavours to comply fully with HEFCE and other statutory requirements. The University’s view of acceptable risk is derived from a balanced view of all the risks in its operating
environment. Risks are prioritized and assessed according to qualitative and quantitative measures. The strategy is as follows:
(i)A Risk Steering Committee (RSC) oversees the risk management process as a whole, on behalf of Council. The Chair of the Risk Steering Committee is the Senior Pro-Vice- Chancellor who attends Audit Committee meetings. The Chair of the Audit Committee is one of three Council representatives on the Risk Steering Committee. This strengthens the link between audit and risk management;
(ii)A Risk Policy is reviewed annually;
(iii)The identification of the fundamental risks affecting the University and its Departments, Faculties, and central bodies. These are reviewed biannually to ensure that the full scope of the University’s activities is covered;
(iv)Determining the appropriate risk appetite and level of exposure for the University as a whole;
(v)Implementation of arrangements to manage fundamental risks and examination of the effectiveness of those arrangements.Where risk management is judged weak, poorly understood, or limited in effect, controls have been and will be enhanced;
(vi)Allocating responsibility for the management of risks to senior university officers;
(vii)A review of risks and their management at least once a year.
(i)Audit Committee
The Audit Committee provides advice to the Council on the effectiveness of the Risk Steering Committee and on the internal control system, including the University’s system for the management of risk. The Audit Committee received the Risk Steering Committee’s annual report and annual review of the University’s key risk register at its November 2015 meeting. The interim revised key risk register was received at the May 2016 meeting.
Members of the Audit Committee are invited to bring their copies of the key risk register to all meetings to help inform discussions of audit reports and the impact on risk management, and also to plan the audit cycle.
A programme of presenters to speak to the Committee about key risks and to answer questions directly from Committee members was initiated in 2014–15 and continued during the course of 2015–16. The Committee received the following presentations:
8 October 2015 – The Head of the International Strategy Office, Dr Toby Wilkinson, spoke about the University’s international strategy and the management of risks in relation to its international activities.
14 January 2016 – The Managing Director of BAE Systems Intelligence, Mr Kevin Taylor, gave an external view on cyber security risks and mitigating actions. The Director of the UIS, Dr Martin Bellamy, followed with a presentation on actions taken in the University with respect to cyber security.
10 March 2016 – The Senior Pro-Vice-Chancellor gave a current assessment of the risks on the Key Risk Register for which he was owner (Financial health, Key infrastructure, Estate).
5 May 2016 – The Pro-Vice-Chancellor (Education), Professor Graham Virgo, gave a current assessment of the risks on the Key Risk Register which he owned (Student Access/Admissions and Student experience and quality assurance).
30 June 2016 – The Director of Health and Safety and Regulated Facilities, Dr Martin Vinnell, discussed the recent development of his Division and associated key risks.
In 2015–16 senior officers were also invited to attend meetings to supplement the presentation of two of the annual reports received by the Committee. The Head of the University Research Office and two colleagues attended to discuss their report on Research Grants Sponsors audits at the March 2016 meeting and one of the joint Heads of Legal Services attended the June 2016 meeting for the Annual Report on Bribery and Corruption.
For those audit reports which carried limited assurance a senior officer was invited to attend the Committee meeting to give opportunity for a response to the report and to allow for questions. In this regard the Audit Committee heard directly from the Academic Secretary and Head of Graduate Student Administration on the Graduate and Exam Progression audit, from the Pro-Vice-Chancellor (Education) on the Sports Clubs and Events audit, and from the Director of Estate Strategy on the Minor Works audit reports.
The Vice-Chancellor gave his annual report to the Committee at its January meeting.
(ii)Internal audit programme
The internal audit programme is responsible for providing independent and objective assurance on the University’s operations in order to evaluate and improve the effectiveness of the University’s internal control systems. The internal audit strategy is developed around the University’s objectives and assessment of its fundamental risks including an evaluation of the effectiveness of the University’s risk management process.
Deloitte LLP were reappointed for three years with effect from 1 August 2014 to provide the University’s internal audit function. This was subject to a refreshed approach to their service which included an increased focus on priority risk areas aligned with the University’s Key Risk Register, a broader insight from specialist and senior input, and greater self-assurance by Schools and Departments. The self-assurance is achieved both by an annual survey issued to Departments which asks questions relating to key risk areas and data analytics (using tools to interrogate data sets in financial systems to pick up any anomalies) to give efficient assurance on Departments’ compliance with key processes in high risk areas. The survey includes a set of questions on risk management practices. The annual report of survey findings enables the Committee, administrative offices, Schools and Departments to see at a glance where weaker areas exist by both Department and topic.
(iii)External audit
External audit informs the Audit Committee on the operation of the internal financial controls reviewed as part of the annual audit.
The Audit Committee has a number of standing agenda items: Value for Money (‘VFM’), Fraud, Risk Management, and HEFCE. For each of these items it requests updates from senior University officers and also seeks assurance from the internal auditors.
The University’s Resource Management Committee (‘RMC’) oversees VFM reporting for the University. The Chair of RMC, the Senior Pro-Vice-Chancellor, attends Audit Committee meetings and provides statements on behalf of the RMC. Economy, efficiency, and effectiveness in use of resources are considered within each system audit undertaken and recommendations are made in the individual audit reports as appropriate.
A set of VFM reporting indicators approved by the Resource Management Committee are employed and form part of the annual report to the Audit Committee which is received at the November meeting. The indicators focus on ‘institutional effectiveness’ at the strategic level and, by focusing on overall performance in core areas of teaching, research, and administration, aim to demonstrate how effectively the University uses its resources. Various measures are used to indicate how well the University is using its resources and transforming them into ‘results’, and, ultimately, whether the University is institutionally effective. Performance can be tracked over time and considered in comparison to the University’s key competitors.
In 2015–16 the University began participating in a pilot of the UniForum programme which is a university benchmarking exercise to help institutions understand the cost of its services. Results are expected in December 2016.
Efficiency and VFM values continue to be promoted through both local level and University-wide initiatives such as shared financial services, use of the Data Centre, equipment sharing and work on procurement practices, and energy and sustainability.
Under the Financial Regulations, any member of staff must report immediately to the Registrary and the Director of Finance any suspicion of bribery, fraud, or other irregularity. Instances of bribery and fraud that involve sums of over £25,000 must be reported to HEFCE under the terms of the Financial Memorandum.
Over the 2015–16 academical year there have been no instances of bribery or fraud in excess of £25,000. There was one report of fraud in the University under this threshold which concerned an employee who had ordered equipment for their own use. Cambridge University Press and Cambridge Assessment make separate reports of fraud to the Audit Committee. Cambridge University Press identified one case of fraud, which was reported to HEFCE since it was over the threshold. Cambridge Assessment had no cases to report.
Risk management is a standing item on the Audit Committee’s agenda. The University’s Key Risk Register is updated and reviewed by the Risk Steering Committee which meets twice a year. The Risk Steering Committee reports to the Audit Committee on updates to the Key Risk Register in May and October. The October review forms part of the Risk Steering Committee’s annual report which is submitted to the Audit Committee in November.
The Senior Engagement Partner of Deloitte LLP attended both Risk Steering Committee meetings in 2015–16 as an observer. This helped give the internal auditors better insight into the University’s approach to and discussions about risk.
The annual summary of Schools’ and Non-School Institutions’ (NSI) risks was presented to the Risk Steering Committee at its half-year meeting. These summaries were subsequently shared with Schools and NSIs to allow them to view others’ risk profiles and to encourage consistency across the types of risks identified and the assessments made. The risk management training seminars delivered through the Personal and Professional Development (PPD) training programme and offered to staff across the University were continued in Michaelmas Term 2015 and Lent Term 2016. Two Departmental Administrators from different Schools attended the seminars to champion the benefits of risk management at a local level and to help promote best practice and consistency of approach. Separately, a training session on risk management was presented to a selection of Departmental Administrators from the School of Clinical Medicine. Further sessions have been offered to all Schools in advance of the forthcoming preparation of risk registers and business plans for submission by institutions as part of the 2016 planning round.
Local Emergency Action Plans are now stored online on Estate Management’s Micad system. This system contains detailed building plans and compliance documents so is a natural platform for hosting the plans. A further advantage of this system is that it helps automate the procedure for sending institutions timely reminders to review and update their plans and to carry out test exercises. The system also shows information about departmental occupancy of buildings, enabling any missing plans to be readily identified.
In collaboration with the University Information Services Division, work has continued in 2015–16 on equipping the University’s Silver Team with essential IT facilities to assist the Team in an emergency. Work is currently underway to consider a new option for the secondary incident room because the current venue is subject to future re-development.
The University Silver Team was led through a desktop exercise on crisis communications by an external consultant, Mr Donald Steel, in January 2016.
A sub-set of the Silver Team was convened in May and June 2016 following two separate incidents. Follow-up actions have been taken in both cases to reduce the risk of further occurrence of similar events.
(i)HEFCE’s assessment of institutional risk
The Committee received a copy of the letter from HEFCE in March 2016 stating its opinion that the University is ‘not at higher risk’.
(ii)Assurance on Colleges’ use of HEFCE funds
The Committee has agreed a protocol enabling the Director of Finance, on an annual basis, to provide assurance to the Audit Committee that the funding transferred to the Colleges was being used for the intended educational purposes. The calculation for 2015–16 was considered by the Audit Committee at its meeting in March 2016. The exercise involved looking at the total expenditure on education by Colleges against their total educational income including the College fee. The small number of cases where there was a surplus could be explained. The Committee was happy to give the assurance that the tuition income was properly applied by the Colleges for educational purposes.
In support of the mechanism described above, an annual meeting takes place between the Chair of the Audit Committee, the Chair of the Colleges’ Committee, the Registrary, and the Chair of the Bursars’ Committee. An agreed note of the meeting is submitted to the Audit Committee. The annual report by the General Purchasing Sub-Committee to the Bursars’ Committee on Value for Money is also submitted to the Audit Committee. The meeting took place in March 2016 (see Appendix E). Note that Appendix E includes the more recent report received following the meeting to cover the 2014–15 financial year with updates on 2015–16 initiatives.
The Chair of the Bursars’ Committee Value for Money Sub-Committee reported on different intercollegiate value for money exercises such as energy purchasing, joint training events, and joint event organization. IT was a significant feature of collaboration between the University and Colleges. It was noted that there was cross-representation on both University and College committees that looked at value for money activities.
In addition to the standing agenda items, the Audit Committee has considered the following items as part of its business during the 2015–16 financial year:
(i)Policy against bribery and corruption
The Committee received an annual review of the University’s policy against bribery and corruption at its June 2016 meeting. There had been no reports of bribery. Cambridge University Press and Cambridge Assessment have separately provided assurance to the Audit Committee that their own policies against bribery and corruption are compliant with the University’s policy.
Training via the online Bribery and Corruption training module has continued with institutions showing weaker participation targeted. Monitoring of training participation overall continues. Online guidance across the University is being updated to ensure that there is consistent advice on who should undertake training and how frequently. Procurement contracts have been reviewed to ensure that appropriate anti-bribery clauses have been incorporated. A comprehensive review of other forms of contract will now be undertaken.
There was one case of whistleblowing in the University. Following a full review by the HR Division, the claims were considered to be unsubstantiated.
(ii)North West Cambridge Project Phase 1
In the light of potential forecast budget cost overruns reported for the project to the Finance Committee and the Council in July 2015, the Audit Committee, on the recommendation of these senior bodies, established an Audit Group. The Group was chaired by the Chair of the Audit Committee and consisted of a further member of the Audit Committee, the Finance Committee, the Senior Pro-Vice-Chancellor, and one external member.
The Audit Group reported to the October meeting of the Audit Committee and its recommendations were considered and adopted by the Council at its meeting on 19 October 2015. The Audit Group separately reported on the broader governance questions for the North West Cambridge development and other large projects. The Committee received the second report for discussion at its January 2016 meeting. The Secretary of the Audit Group, Mr David Parsons, Deputy Director of Legal Services, attended for the discussion.
(iii)Review of effectiveness
At its January 2016 meeting, the Committee agreed to commission an external consultant to conduct a review of the Committee’s own effectiveness. This decision was made following consideration of a Leadership Foundation Report into the effectiveness of HEI Audit Committees. The review involved individual interviews with all members and regular attendees of the Committee. The consultant also observed the June 2016 meeting. The consultant’s report is being submitted to the Committee’s October meeting for presentation and discussion of the findings.
Audit Committee workshops are opportunities to discuss strategic issues in more depth, often based around an expert presentation. These workshops operate in part as professional development opportunities for the Committee’s members. A workshop on pensions, with particular focus on USS, was held at Trinity Hall on 6 July 2016. The University’s independent actuary, Mr Jonathan Seed of Xafinity Consulting, gave a presentation in which he highlighted the University’s pension commitments and associated risks. Mr Howard Jacobs, Chair of the trustee of Cambridge University Assistants’ Contributory Pension Scheme, contributed to discussions.
Appendices B–E are available online at http://www.admin.cam.ac.uk/reporter/2016-17/weekly/6450/AuditReport_Appendices_2015-16.pdf.
1The % figure differs from that given in the Internal Audit Annual Report for the reasons outlined in paragraph 1.2.
2Figures refer to Committee members, senior officers, and Chairs of CUP and CA Audit Committees.
3Owing to the delayed arrival of the Chair, the meeting was inquorate for the first five items on the agenda.
4The Vice-Chancellor attended this meeting to give his annual report to the Audit Committee.
5Statutes and Ordinances of the University of Cambridge, 2015, p. 49.