ARAC Minutes - 11 June 2024

Present

Chair’s welcome, apologies and declarations

The Chair welcomed everyone present to the meeting.   Everyone introduced themselves.  ARAC noted apologies from Audit Scotland Audit Manager Sanya Ahmed (SA), Fiona Johnston SHR Regulation Analyst (Finance) and SHR staff observer Rosi O’Neill - Regulation Manager (Finance)

There were no declarations of interest.

Minutes of the previous meeting, matters arising & audit log

ARAC considered and approved the minutes from the last meeting on 12 March 2024.  It noted that the one related action had been completed with SHR Board.

ARAC noted and welcomed that all recommendations from the Audit Log have been completed.  IM confirmed that decisions to approve the new Records Management Policy and Records Retention Policy are not retained by SHR Board and they were considered by Management Team.  He explained that this is part of SHR’s Records Management Plan, which SHR is preparing for submission to the Keeper during 2024/25.  

Internal Audit Update

LC presented an update on internal audit work to ARAC. She highlighted that the annual assurance opinion for 2023/24 is substantial assurance and explained this is based on audit work as well as engagement with ARAC, SHR Management and broader staff team during the year.   ARAC considered the opinion and discussed:

• a minor correction, noting that LC will update this and recirculate the report; and
• reference to reasonable assurance (emerging) in connection to Scottish Government corporate systems, nothing this was the position at the time of writing and this is now reasonable.

PM presented the update report to ARAC.  He reported that all the work plans for 2023/24 have been completed and the last report is provided to ARAC today.   PM explained that planning for work on notifiable events has been completed with the terms of reference issued and field work due to commence.   PM also highlighted the Internal Audit Charter and Internal Audit Quarterly Bulletin.  He explained that follow-up work around deregistration of RSLs that was planned for April has been postponed to June 2024 to allow for all of SHR’s guidance updates to be completed. 

PM presented a report on SHR’s Regulatory Framework review and reported that the review did not identify any recommendations and a substantial assurance rating has been provided.   ARAC welcomed the assurance, especially given that SHR carries out Framework reviews generally on a five year cycle.  

LC reported that work is ongoing within Scottish Government Internal Audit to consider the impact of the new Global Internal Audit Standards, which come into effect from January 2025 and that she will provide further updates to ARAC. 

ARAC noted the updates and thanked the Internal Audit team and all those involved from SHR for their work.  

Actions:

• LC to update the minor correction in the report and recirculate it.
• LC to update ARAC on the impact of new Global Internal Audit Standards.

External Audit Update

LY presented the Audit report to ARAC and reported that the subject to completion of outstanding matters she anticipates being able to issued an unqualified audit opinion in August 2024 when the Accountable Officer will sign SHR’s Annual Report and Accounts.  

ARAC consider the proposed report and discussed:

• outstanding matters. It noted that Scottish Government has now provided certificates of assurance and that CN will share these with LY: and
• annual leave estimates, noting that this is a standard part of audit work.

LY presented in further detail the proposed report on SHR’s annual report and accounts.  She highlighted:

• that the report and accounts give a true and fair view and were properly prepared;
• significant findings, explaining these have been resolved including work around the

the renumeration report, intercompany journals between SHR and Scottish Government and staff contracts; and

• work that SHR has done around workforce planning so that that she has been able to close this historic audit recommendation.

LY thanked IM and all of the team involved in the annual report and accounts for the speedy preparation so close after year end and support during audit.  

ARAC considered the report and discussed staff contracts and potential risks to SHR.  It noted work to locate historic contracts that are issued by Scottish Government rather than SHR.  ARAC noted that IM is continuing to establish a final position with Scottish Government HR and will keep ARAC updated. 

ARAC noted that outstanding matters regarding pensions are expected shortly and this will allow for the report to be completed and the annual report and accounts provided to SHR Board in August for signing thereafter by the Accountable Officer.

 Actions:

• CN to provide Scottish Government certificate of assurance to LY.
• IM to update ARAC on discussion with Scottish Government HR around SHR contracts.

Draft Annual Report and Accounts 2023/24

ARAC considered the draft annual report and accounts for 2023/24 and agreed to recommend that these are approved by SHR Board in August 2024 and following the Board meeting are signed by the Accountable Officer.  

Annual report on Fraud, Security and Whistleblowing

CN presented an annual report to ARAC detailing any incidents of fraud or security breaches during 2023/24.   She highlighted the appended data protection compliance monitoring report prepared by SHR’s Data Protection officer.   CN also explained a minor error around dates for clarification, confirming references should all be regarding 2023/24.

ARAC discussed learning and training in relation to any data breaches.  It noted training for staff and oversight arrangements of any issues that may arise by SHR’s Information Management Group.  IM confirmed that all subject access requests had been made by people external to SHR.  

ARAC considered and noted the report.  

2023/24 Statement of Annual Assurance from ARAC to SHR Board & Accountable Officer

CN presented a draft summary report of ARAC’s work for 2023/24 to provide assurance to SHR Board & Accountable Officer.   ARAC considered and approved the report for signing by SW as ARAC Chair.  It noted that this will be provided to SHR Board in August 2024. 

Action: SW to sign the 2023/24 Statement of Annual Assurance from ARAC to SHR Board & Accountable Officer for provision in August 2024. 

Risk report

IM presented SHR’s risk register to ARAC.  He explained that this version was reviewed by SHR Board in May and following that Management Team in June, but no changes were made.  He highlighted the issues and changes to the register since ARAC last considered it in March 2024 and that Management Team agreed it was too early to reflect the Scottish Government’s housing emergency in the register, but this will be kept under review.  

ARAC considered the pressures on landlords and noted a recent SHR Board discussion. MC updated ARAC on a recent Scottish Government Housing 2040 Strategy Board and the Scottish Government’s work to form a response to the Housing Emergency. 

ARAC noted the report. 

Agenda Planner, AOB, observer feedback

ARAC considered the agenda planner and noted that assurance mapping has been moved from June to September 2024.  ARAC will meet next on 10 September 2024. 

NG reported that changes to international IOS will impact RSLs, but will not impact SHR. 

RH reported that work is ongoing to facilitate changes to ARAC membership, including handover of the Chair from SW to EF at the end of the year and also induction of a new member currently being recruited to SHR Board by Scottish Ministers during the autumn.

ARAC noted the updates.

CCR thanked ARAC for the opportunity to observe and ARAC noted her feedback.  

Private session

ARAC held a private meeting with the auditors.