Financial Statements 2017/18
Internal Control
The University’s Board of Governors is responsible for ensuring that the University maintains an effective system of internal control that supports the achievement of strategic aims and objectives whilst safeguarding assets for which it is responsible. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. This process has been in place for the year ended 31 July 2018 and up to the date of approval of the financial statements, and accords with Office for Students guidance.
The Board of Governors has delegated the day to day responsibility to the Vice-Chancellor, as Accountable Officer, for reviewing the adequacy of the system of internal control and making any appropriate amendments. He is also responsible for reporting to the Board of Governors any material weaknesses or breakdowns in internal control.
The following processes are in place to ensure the effectiveness of the University’s internal control and risk management:
— The Board of Governors meets six times a year to consider the plans and strategic direction of the Institution. It is advised by its key committees, receiving regular reports from each committee and other reports from management as required. In addition the Board of Governors holds two away days each year to discuss the strategic plan in greater detail. The assumptions and aims are reviewed against domestic demand, international demand, funding and research and business development.
The Board of Governors ensures that its meeting calendar enables risk management and internal control to be considered on a regular basis during the year. Its review of the effectiveness of the system of internal control is informed by the work of the internal auditors who operate to the standards defined in the OfS guidance of audit practice:
— The Executive team receives reports setting out key performance and risk indicators and considers possible
control issues brought to their attention by early warning mechanisms which are embedded within the operational units.
— The Executive team and the Audit and Risk Committee also receive regular reports from internal auditors, who provide independent opinion on the adequacy and effectiveness of the University’s system of internal control, together with recommendations for improvement. The Audit and Risk Committee’s role in this area is to conduct a high level review of the arrangements for internal financial control.
— The Internal Auditors provide the Board of Governors with an independent opinion each year on the adequacy and effectiveness of the University’s risk management, control and governance processes.
The Internal Controls Committee is responsible for overseeing an assessment of the effectiveness of internal control on a rolling basis and provides periodic reports to the Governors through the Audit and Risk Committee. The Committee identifies and evaluates the key controls required for significant risks faced by the University and to consider a risk-based assessment of effectiveness.
— An organisation-wide risk register is maintained and is available on the University’s intranet. The register is reviewed and updated regularly, and management report on the actions taken to mitigate risks. The register and strategic plan are cross referenced to each other as an additional mechanism for the identification of risks. Departmental plans report on the local management of corporate risks, identify risks at an operational level and include plans for the mitigation of these risks. An independent review of the University’s processes and procedures for monitoring risk and maintaining its risk registers was undertaken during 2016/17 and recommendations arising from the review were implemented during 2017/18.
— Monthly management accounts are presented to the Finance Committee and governors. The annual budget and financial forecasts are presented to the Finance committee ahead of formal approval by the Board of Governors.
Middlesex University
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