Skip to main contentCambridge University Reporter

No 6334

Wednesday 22 January 2014

Vol cxliv No 17

pp. 291–319



24 January, Friday. End of first quarter of Lent Term.

25 January, Saturday. Congregation of the Regent House at 2 p.m. ( see p. 307).

4 February, Tuesday. Discussion at 2 p.m. in the Senate-House (see below).

9 February, Sunday. Preacher before the University at 11.15 a.m., Reverend Professor D. A. Wilkinson, F, Principal of St John’s College in the University of Durham.

13 February, Thursday. Lent Term divides.

Notice of a Discussion on Tuesday, 4 February 2014

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, 4 February 2014, at 2 p.m., for the discussion of:

1. Report of the General Board, dated 3 January 2014, on the establishment of a Readership in Corporate Law (Reporter, 6333, 2013–14, p. 287).

Notice of benefactions

The Vice-Chancellor gives notice that he has accepted with gratitude the following benefactions, of which both the capital and the income may be used:

(i)a benefaction of £50,000 from the Frances and Augustus Newman Foundation to support the research of Dr Tuomas Knowles in the Department of Chemistry, bringing to a total of £650,000 donations made by the Foundation in support of holders of Next Generation Fellowships in the Department;

(ii)an anonymous benefaction of £50,000 pledged under the Gift Aid Scheme to support the construction and fit-out of squash courts at the University Sports Centre.

‘Scarlet days’ and flying of the University Flag from the Old Schools

Scarlet days

The Vice-Chancellor wishes to remind members of the University of those days in 2014 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 also wishes to designate 18 June (Congregation for Honorary Degrees) as a ‘scarlet day’ in 2014.

20 April

Easter Day

29 May

Ascension Day

 8 June


15 June

Trinity Sunday

18 June

Honorary Degree Congregation

25, 26, 27, and 28 June

General Admission to Degrees

 1 November

All Saints Day

 2 November

Commemoration of Benefactors

25 December

Christmas Day

Flying of the University Flag from the Old Schools

Published for information are the days when the University Flag will usually be flown:

 6 February

Accession of HM The Queen

21 April

Birthday of HM The Queen

23 April

St George’s Day

10 June

Birthday of HRH The Duke of Edinburgh

14 June

Official Birthday of HM The Queen (t.b.c.)

14 November

Birthday of HRH The Prince of Wales

Congregation days, including 18 June (Honorary Degrees), 25, 26, 27, and 28 June (General Admission to Degrees), and 1 October (Address by the Vice-Chancellor and Election and Admission of the Proctors)

Report of the General Board on the establishment of a Professorship of the History of Art: Notice in response to remarks made in Discussion

20 January 2014

The Council has received the remarks made at the Discussion on 14 January 2014 (p. 308) concerning the above Report (Reporter, 6330, 2013–14, p. 234).

The Council notes Dr Salmon’s support for the establishment of the Professorship and is submitting a Grace (Grace 4, p. 307) to the Regent House for the approval of the recommendations of the Report.

Report of the General Board on the establishment of a Stephen W. Hawking Professorship of Cosmology: Notice in response to remarks made in Discussion

20 January 2014

The Council has received the remarks made at the Discussion on 14 January 2014 (p. 308) concerning the above Report (Reporter, 6327, 2013–14, p. 133).

The Council recognizes that the speakers in the Discussions voiced opinions both for and against the Report’s proposals, as well as concerns on a significant number of points of detail. The Council has agreed that the appropriate way to proceed is for the Council itself to initiate a ballot on a Grace for the approval of the recommendation of the Report, to enable the Regent House to determine the matter. In doing so, the Council, after consultation with the General Board, has agreed to comment on the following substantive matters which were raised by several speakers:

(a)It was suggested that the mechanism for payment of the Crown Distribution circumvents the University’s salary structure. While this may appear to be the case, the discretion of the Trustees of The Dennis S. Avery and Sally Tsui Wong-Avery Endowment Trust is constrained by the requirements of charity law to pay only what is reasonably necessary to recruit or retain the Professor.1 As elaborated in the remarks of Professor Sanders, speaking on behalf of the Trustees, the Trustees have agreed a mechanism for determining the value of the Crown, in the light of relevant information, that should … ‘not lead to salary levels for the Hawking Professor that are significantly different from those of colleagues of comparable distinction’. This should provide substantial assurance to the Regent House that the payment of the Crown will neither give rise to equal pay issues nor concerns about bestowing a private benefit on the individual as suggested in the Discussion.

(b)Concern was expressed that the arrangement might set an unfortunate precedent for the introduction of performance review for University officers. The Report in paragraph 5 makes clear that, irrespective of the period for which the Professor holds the title of Stephen W. Hawking Professor, the Professor would hold the office of Professor from the outset until the retiring age. Only the grant of the title is subject to a periodic review process provided for in Regulation 5 for the Professorship.

(c)Concern was also expressed about the potential financial burden falling on the Department of Applied Mathematics and Theoretical Physics and the School of the Physical Sciences as a consequence of meeting the employment costs of any former holders of the Professorship who revert to holding a single tenure Professorship for the remainder of their employment. This is considered in paragraph 10(b) of the General Board’s Report, which makes it clear that the School will be able to manage the extent of that liability by, if necessary, declining to fill a vacancy in the Professorship, or indeed any other vacant post.

The Council is submitting a Grace (Grace 1, p. 306) to the Regent House for the approval of the recommendations of the Report, to be put to a ballot in accordance with the timetable set out below.

Report of the General Board on the establishment of a Stephen W. Hawking Professorship of Cosmology: Notice of a ballot

In accordance with Regulation 7 of the regulations for Graces of the Regent House (Statutes and Ordinances, p. 103), the Council gives notice that a vote will be taken on Grace 1 (p. 306). The vote will be conducted in accordance with the Single Transferable Vote regulations (Statutes and Ordinances, p. 115). The timetable will be as follows:

Friday, 31 January 2014, 4 p.m.

Deadline for amendments to the Grace

Tuesday, 11 February 2014, 1 p.m.

Deadline for fly-sheets

Friday, 14 February 2014, 10 a.m.

Opening of online voting

Monday, 24 February 2014, 5 p.m.

Close of online voting

Wednesday, 26 February 2014

Result of ballot announced in the Reporter

Shortly before voting opens, the web address for online voting will be published on the ballots website at and an email providing that link will be sent to members of the Regent House (unless they have opted not to receive these email alerts). Hard-copy voting papers will be distributed not later than 14 February 2014 to those who opted before 6 November 2013 to continue to receive them; the last date for return of voting papers is 5 p.m. on Monday, 24 February 2014.

In connection with the ballot, the Registrary will arrange for the circulation of any fly-sheet, signed by ten or more members of the Regent House, which reaches him at the Old Schools by 1 p.m. on Tuesday, 11 February 2014. Fly-sheets may also be faxed to 01223 332332 or scanned (showing signatures) and sent by email to Fly-sheets must bear, in addition to the signatures, the names and initials (in block capitals) of the signatories (Statutes and Ordinances, p. 108).

Annual Report of the Audit Committee for the financial year 2012–13

The Council has received the Annual Report of its Audit Committee for 2012–13. The report is published for the information of the University. Appendices B–E(ii) are available at

1 Introduction

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 2012 – 31 July 2013 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, a draft of the external auditor’s Management Letter, other work commissioned by the Committee during the year, and on discussions at its meetings and workshops.

1.1 Internal auditor

Deloitte LLP are the University’s internal auditors and were appointed in January 2010.

1.2 Internal audit reports

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 and up to the date of this report. This will include any reports that were issued in draft during 2011–12, but which had not been finalized for the Committee’s consideration until the 2012–13 financial year. This will not include any 2012–13 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 2012–13 and up to the point of writing, the Committee has received and considered 37 internal audit reports. Where a rating was ascribed, 88% of reports were given Satisfactory or Full assurance.1

1.3 External auditor

PricewaterhouseCoopers LLP were reappointed as the University’s external auditors.

2 Audit Committee opinion

This section provides the Audit Committee’s opinion on the adequacy and effectiveness of institutional arrangements during 2012–13 and up to the date of this report.

2.1 Opinion – risk management, control, and governance

The Audit Committee has monitored and considered the effectiveness of the University’s risk management, control, and governance throughout 2012–13. 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 has noted that there has been continuous improvement across the University’s activities: the University, individual institutions, and subsidiary companies are making 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 2012–13 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.

2.2 Opinion – economy, efficiency, and effectiveness (value for money)

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.

2.3 Opinion – data integrity

The Audit Committee has monitored 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 have been conducted in the 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.

3 Audit Committee membership

3.1 Constitution of the Audit Committee

The Constitution of the Audit Committee is set out in the Statutes and Ordinancesof the University of Cambridge (see Appendix B).

3.2 Membership 2012–13


Mr John Shakeshaft


Dr Jonathan Nicholls, Registrary

Assistant Secretary:

Dr Rachel Coupe

There were a number of membership changes over the course of the year and these are summarized in the table below.

Table 1: Membership of the Committee, 2012–13

Class of membership*

Name of member

Limit of tenure


Mr John Shakeshaft

31 December 2014


Mr Robert Dowling

31 December 2012

Mr Mark Lewisohn (from 1 January 2013)

31 December 2015

Dr David Good

31 December 2015


Mr Nicholas Martin

31 December 2012

Mr Peter Doyle (from 1 January 2013)

31 December 2015

Dr Andrew Cates (resigned from 31 August 2013)

31 December 2013

Mr Mike Starkie

31 December 2012

Ms Janet Legrand (from 1 July 2013)

31 December 2015

Mr John Dix

31 December 2013


Professor Nigel Slater

31 December 2013

Dr Thomas Keith Carne

31 December 2013


* Class (a) Chair and external member of the Council; Class (b) members of the Council; Class (c) external members; Class (d) co-opted members.

3.3 Process of appointment

Members are appointed to the Audit Committee by the Council of the University of Cambridge. Membership nominations are made to the University Council’s Advisory Committee on Committee Membership and External Nominations.

3.4 University officers and auditors

The Audit Committee invites certain senior University officers and the University’s external and internal auditors to attend unreserved meetings. On occasion it may also invite other colleagues to attend for a specific agenda item. 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 meet with and answer questions from the Audit Committee annually.

Table 2: Senior officers, auditors, and other colleagues invited to attend meetings during 2012–13



Director of Finance

Mr Andrew Reid

Senior Pro-Vice-Chancellor (Planning and Resources)

Professor Steve Young

Internal Auditor – Deloitte LLP

Mr Mike Barber (October 2012 to March 2013)

Ms Kirsty Searles (from May 2013)

Mr Richard Evans

Mr Richard Neal

External Auditor – PricewaterhouseCoopers LLP

Mr Clive Everest

Mr John Minards

Mr Simon Ormiston

Mr Stephen Wyborn

Chief Executive Officer, Cambridge University Press

Mr Peter Phillips

Chief Finance Officer, Cambridge University Press

Mr Andrew Chandler

Chair of the Press Syndicate (to 1 November 2012)

Professor Anthony Minson

Chair of the Audit Committee of Cambridge Assessment

Mr Bruce Picking

Chair of the Audit Committee of Cambridge University Press

Professor Sarah Worthington

Joint Head of the Legal Services Office

Mrs Joanna Cheffins

Chair of the Overseas Trust / Cambridge Commonwealth Trust Audit Committee

Mr Peter Davison

Independent co-opted member of Cambridge Assessment’s Audit Committee

Mr Robert Ferguson

4 Meetings

The table below provides information on meeting dates and attendance.

Table 3: Attendance at meetings, 2012–13


Members and associate Class

Senior officers and guests














Internal: 2









Internal: 2 External: 3









Internal: 3









Internal: 3 External: 3









Internal: 3









Internal: 2



5 Terms of reference

The Audit Committee’s terms of reference are set out in the 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.

6 Internal audit

6.1 Provider

Deloitte LLP were appointed as internal auditors for the University with effect from 1 January 2010 until 31 December 2014, subject to satisfactory contractual arrangements.

6.2 Review of appointment

The performance of the internal auditors and their lead partner is considered annually by the Committee. Market testing of the internal audit contract took place in Michaelmas Term 2013. Deloitte are to undertake a separate service quality review over the same period.

6.3 Review of internal audit annual report

The annual report for the period 1 August 2012 to 31 July 2013 was received by the Audit Committee at its meeting of 3 October 2013 (see Appendix A). 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 governance, internal control, risk management and value for money for the year ended 31 July 2013. The control issues identified during our work do not materially impact upon the assurance statement provided.”

6.4. Review of audit risk assessment and strategy

Internal audit plans are planned annually by department and function on the basis of the weighted risks and ownership identified in the University’s key risk register.

6.5 Review of audit reports

The Committee considers all reports submitted by the internal auditor. Each internal audit report is assigned to a member of the Committee for detailed consideration. The member then presents the findings to the Committee, highlighting any key points and/or concerns.

Deloitte LLP provide an assessment of the adequacy and effectiveness of systems using the following definitions:


There is a sound system of internal control designed to achieve the University’s objectives. The control processes tested are being consistently applied.


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.


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.


Control processes are generally weak leaving the processes/systems open to significant error of 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.

Priority 2

Issues that are fundamental to the area subject to internal audit, for the attention of senior management and the audit committee.

Priority 3

Important issues to be addressed by management in their areas of responsibility.

Priority 4

Housekeeping issues or good practice suggestions.

6.6 Fees

Fees paid for work completed in FY2012–13 are shown in Appendix C.

7 External audit

7.1 Provider

PricewaterhouseCoopers LLP were re-appointed as external auditors for the University for the financial year 2012–13.

7.2 Review of appointment

In accordance with HEFCE’s Financial Memorandum an external auditor is appointed or re-appointed 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.4

A Grace submitted to the Regent House on 20 February 2013 recommending the reappointment of PricewaterhouseCoopers LLP was approved on 1 March 2013.

7.3 Details of non-audit services

During 2012–13 the external auditor carried out work in the following areas for the University:

(a)Tax compliance and advisory services at Cambridge University Press (CUP).

(b)Audit of special purpose financial statements for CUP India.

(c)Review of award of qualification process for Cambridge Assessment (CA).

(d)External project for Cambridge Programme for Sustainability Leadership.

7.4 Review of the management letter

The external audit management letter 2012–13 submitted by PricewaterhouseCoopers LLP was received by the Audit Committee at its meeting on 14 November 2013.

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.

7.5 Fees

Fees paid for work completed in 2012–13 are shown in Appendix D.

8. Other work undertaken

8.1 Statement of internal control

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 auditor, which include the internal auditor’s 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 auditor. 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 auditor 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 2012–13.

8.2 Review of assurances received

Deloitte LLP has confirmed its reasonable assurance that the University has an adequate and effective system of internal controls for the year ending 31 July 2013. The control issues identified during their work do not materially impact the opinion to be provided in respect of the University’s arrangements for corporate governance, risk management, internal control, and value for money.

8.3 Review of institution’s risk management strategy

(a) The University’s approach to risk management

The University of Cambridge pursues good practice in Risk Management as given in the Turnbull Committee guidance, 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 and revised 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.

(b) Risk management – the role of the Audit Committee and its auditors

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 second meeting of the year. The interim revised key risk register was received at the meeting on 13 March 2013.

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.

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 the fundamental risks including an evaluation of the effectiveness of the University’s risk management process. Risk management arrangements are a standard and continuing aspect of all departmental audits.

iii. External audit

External audit informs the Audit Committee on the operation of the internal financial controls reviewed as part of the annual audit.

8.4 Other work

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 asks for updates from senior university officers and also seeks assurance from the internal auditors.

(a) Value for money

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. The internal auditors consider VFM as a standard item in institution or system audits as well as conducting specific VFM audits as part of the annual plan.

Following the annual assurance meeting on the Colleges’ use of HEFCE funds (see section 8.4(d)iii below), an informal workshop was held in September 2013 with representatives from the Colleges’ Bursars’ Business Committee. The workshop focused on exploring opportunities for collaboration between the University and the Colleges in the context of potential shared services and initiatives designed to provide better value for money for both.

The Resource Management Committee is overseeing a project to develop value-for-money reporting indicators alongside the project on sustainability metrics, with the aim of supporting the annual value-for-money report and facilitating internal and external benchmarking in key areas. The focus of the indicators is at the strategic level and relates to the overall performance of the University as a provider of higher education through its activities in teaching and research and their related support structures. The project is still in development; once approved by the Resource Management Committee the indicators will be provided to Audit Committee as part of the annual value-for-money report.

(b) Fraud

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 2012–13 academic year there have been two instances of fraud in excess of £25,000: one concerning the ESOL division of Cambridge Assessment, Turkey, resulting in a loss of £37,000, and the other regarding the inappropriate use of grant monies, resulting in a loss of £31,000. HEFCE and the Audit Committee have been informed.

(c) Risk management

At the interim review of the University’s Key Risk Register in March 2013, the Risk Steering Committee agreed with the recommendation from the Responsible Officer that the risk ‘Strategy’ should be removed from the Register. Although the University had several ‘lower-level’ strategies, it did not have a single overarching strategy and to imply otherwise was misleading.

A risk management training seminar targeted at Departmental Administrators was launched in Michaelmas Term 2013. The seminar explored what risk management is in generic terms before explaining how it was implemented, measured, and monitored in the University, making clear what was required of administrators and those responsible for risk management in Departments, Faculties, and Schools. The seminar included a speaker from the Faculty of English who champions the benefits of risk management and helps promote best practice and a consistent approach.


i. HEFCE’s Assessment of institutional risk

The Committee received a copy of the letter from HEFCE stating its opinion that the University is ‘not at higher risk’.

ii. Governance arrangements

The HEFCE, in August 2011, asked the University to commit to review its governance arrangements in the light of changes in Higher Education by the end of the 2013–14 academical year and to inform the HEFCE of its conclusions. The Audit Committee has asked the Council to consider how such a review might best be conducted and has suggested that it might follow the model of self-reflection adopted for preparation for the quinquennial visit by HEFCE in 2008.

iii. 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 2011–12 was considered by the Audit Committee at meetings in November 2012 and January 2013 and included endowment income restricted for educational purposes. The findings demonstrated that there was still adequate headroom between each College’s expenditure on undergraduate education and the funding transferred (see Appendix E(i)).

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 of the Resources Sub-Committee of the Bursars’ Committee on Value for Money is also submitted to the Audit Committee. The third such meeting took place in March 2013 (see Appendix E(ii)).

(e) Non-standard items

In addition to the standing agenda items, the Audit Committee has considered the following items as part of its business during the 2012–13 financial year:

i. Review of Woolf Inquiry Report recommendations

The Audit Committee was asked by Council to consider the recommendations of the Woolf Inquiry report concerning certain matters at the London School of Economics against the University’s own processes for the solicitation and acceptance of donations. A working group was set up for this purpose, chaired by the Chair of the Audit Committee. The Group’s report was submitted to the Audit Committee in March 2013. The Working Group had asked key representatives of the offices and committees in the University to review procedures in the four key areas covered by the Woolf Inquiry, namely ethics, graduate admissions, donations, and ‘incidental links’. In each case, representatives had commented on the relevance of the Woolf recommendations for Cambridge. In conclusion, the Working Group was substantially reassured that the University’s policies and procedures were effective and fit for purpose. The Audit Committee endorsed the Group’s recommendations and commended them to Council.

ii. Cambridge University Press

In November 2012, senior officers of Cambridge University Press attended the Audit Committee for a discussion of the Press strategy and its implementation. The Committee was informed of improvements in the provision of digital services and the development of the Press’s relationship with Cambridge Assessment with the aim of identifying opportunities for collaboration in international markets. Short-term financial progress had been achieved through staffing changes; longer-term progress relied on the implementation of SAP and the development of a global approach to the finance function. The Committee noted that one of the most significant challenges for the Press would be to maintain the right balance between implementing new systems to improve the internal operation of the organisation and responding to the changing external environment so as to pursue the appropriate business strategy for the Press.

The Audit Committee was reassured that satisfactory internal controls were in place and it recommended that the Joint Oversight Group, which had been set up to oversee and report on the changes taking place in the Press, be disbanded with effect from March 2013. ‘Cambridge University Press’ has been added as a new standing agenda item and business is brought forward as necessary by the Chair of Cambridge University Press Audit Committee, Professor Worthington.

iii. Penningtons audit

Specialist lawyers had been appointed to carry out an assessment of the University’s systems for ensuring compliance with Tier 2 and 5, and Tier 4 sponsor licences. Deloitte had agreed the terms of reference with Penningtons. The assessment for Tier 2 (General) and Tier 5 (Temporary Worker Government Authorized Exchange) licences covered employees of the University only. Colleges had their own sponsor licences in each case. Although there were several recommendations, the responses by the University’s Human Resources Division were reassuring and indicated that the issues could be addressed, and that procedural changes were already underway as a result.

The findings concerning the Tier 4 (students) sponsor licence posed more complications due to the complex relationship between the University and the Colleges which involved distinct as well as shared responsibilities in relation to students. The Committee observed that the University was actively engaged with UKBA to find ways of making licence requirements more appropriate for the Collegiate University.

iv. Bribery and corruption

The Committee received an annual review of the University’s Policy against Bribery and Corruption. The review summarized the actions that had been taken to implement the Policy across the University including details of reported bribery and fraud. Work is set to continue over 2013–14 to encourage subsidiaries to adopt the University’s Policy and to develop more specialized training for staff in the International Office and Development and Alumni Relations.

8.5 Workshops

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. During the financial year 2012–13 one workshop was held. The topic was the University’s programme of Learning and Teaching Reviews and the speaker was the Pro-Vice-Chancellor (Education), Professor John Rallison. Professor Rallison explained the purpose of Learning and Teaching Reviews and outlined the terms of reference and Committee membership requirements, before concluding with an example of a typical Learning and Teaching Report.


  • 1This % figure differs from that given in the Internal Audit Annual Report for the reasons outlined in paragraph 1.2.

  • 2The Vice-Chancellor attended this meeting to give his annual report to the Audit Committee.

  • 3The Committee was not quorate. It was agreed that the minutes of the meeting, including details of decisions proposed, would be circulated for subsequent endorsement at the next meeting.

  • 4Statutes and Ordinances of the University of Cambridge, 2013, p. 55.