Minutes of the VSS Audit and Risk Committee

Wednesday 16 April 2025, 10am

Microsoft teams meeting Teams

ARC Members Present:

John Cahill (JC)                            ARC Chair

Briege Lafferty (BL)                      ARC Member

Brian Gilfedder (BG)                  ARC Member

VSS Officers in Attendance:

Andrew Walker (AW)                    Chief Executive Officer

Victoria Murray (VM)                    Acting Head of Corporate Services

Courtney Powell (CP)                  Acting Finance Manager

Adam Strong (AS)                        Risk and Governance Manager

Diksha Balodia (DB)                     Minutes

Others in Attendance:

Andrew Allen (AA)                      NIAO (External Audit)

Alastair Carroll (AC)                   TEO

Catriona McHugh (CMcH)           Cavanagh Kelly (Internal Audit)

Elicia Erasmus (EE)                   Cavanagh Kelly (Internal Audit)

Caroline Laird (CL)                     NIAO (External Audit)

A       Apologies

Linda Mervyn                               TEO

B Minutes

          The minutes of the previous meeting on January 16, 2025, were approved.

C       Action Points

AP1 January 2023:

An updated draft of the VSS Risk Management Strategy is due to be tabled for discussion at the upcoming Board meeting on 30 April 2025. Periodic review of departmental risk registers will commence from the next ARC meeting.

AP2 January 2025:

VSS does not use Account NI for the processing of payments and already operates in accordance the requirements of the new Procurement Act with regard to payment terms and reporting. Action closed.

D       Conflict of Interest

All papers were noted by the Committee and no conflicts of interest were declared.

E       Accounting Officer Update

E1 CEO/AO Exception Report

CEO exception report was discussed by AW. AW pulled out some key issues for comment.

VSP Planning

VSS has continued working towards planning for the new VSP programme and funding calls, scheduled for May/June 2025. VSS engaged with 27 groups and community partner organisations through February and March to host co-design sessions to discuss the new VSP programme. The information gathered through these sessions and inputs from internal working groups and CVS is being reviewed and collated to inform the design of the programme.

VSS has continued engagement with TEO regarding the Outline Business Case for VSS funding, with 3 alternative costing and funding options submitted earlier in February for consideration by TEO. Approval for funding is expected by May/June for the 2-year programme, which would align with the close of the PEACEPLUS programme in 2028. No significant budgetary increases are expected over the next 2-years, and the programme design will continue to evolve to adapt to the challenges that arise in relation to effective resource utilisation within budget constraints.

VSS has submitted a proposal paper to TEO identifying an alternative funding mechanism for additional funding towards the VSP programme, setting out the basis for a fair cost contribution from the TPDPS ring-fenced budget to be reallocated towards VSP. The proposal details that a large proportion of victims and survivors seek support from community partner organisations in connection with the TPDPS scheme, leading to significant contributions from VSP resources towards staffing support with applications, accessing services, and health and wellbeing activities.

Finalisation of the preferred funding options remain contingent upon TEO consideration and conclusion on the TPDPS cost contribution proposal.

Budget Allocation 2025/26

VSS received confirmation of the opening budget allocation for 2025-26 on 5 March. Significantly, this budget confirmation in advance of the new financial year allowed for early completion of SDA payments on 7 April. AW acknowledged the contribution of all VSS staff in the SDA payment process, allowing the payments to be sent out on schedule.

A small increase in budget was received towards covering increased staffing costs as a result of the agreed NICS pay awards for 1 August 2024 and 1 August 2025.  The additional budget provided has allowed for a small pot of unallocated funds to be reserved to meet emerging needs, and VSS will now issue a funding call to identify expected pressures within community partners and create a reserve list to support groups’ needs throughout the year as additional resources become available.

The injection of funding from TPDPS as previously noted would further contribute towards meeting emerging needs through the course of the year.

Regional Trauma Network

The RTN is at the 2-year mark in the planned 3-year pilot phase, with the 3-year review of the pilot programme due to commence in April/May 2026. VSS has noted low levels of activity in relation to referrals from Health Trusts to the C&V sector and is actively working to remedy the issue through continued engagement with Trusts and C&V groups to create awareness about working together effectively. VSS will also pilot an approach where all referrals from Trusts are directed to VSS in the first instance for co-ordination and onward referral to the appropriate C&V organisations.

MBMLW

The closing date for individuals to provide testimonies to the Truth Recovery Independent Panel is approaching on 1 May 2025, with over 140 individuals having provided their testimonies as of mid-February. Current expectations are that the draft bill for a statutory Public Enquiry and Redress Scheme will be published in mid-2025 with a Redress Scheme in place in early 2026.

AW noted that whilst initial planning assumptions were that no support would be required for the initial ‘Standardised Payment’ element of the planned Redress Scheme, TEO has now indicated that there will be support requirements, and VSS are working with TEO and community partners to establish the precise nature of these and the associated capacity for delivery.

PEACEPLUS

The VSS-PULSE programme was officially launched in April 2025, with accompanying press statements and photographs.

The first meeting of the PEACEPLUS Advocacy Support Network was held on 27 February with 6 organisations providing legacy support in attendance to discuss collaborative approaches to better support victims and survivors.

SDA Programme

VSS successfully sent out all Self-Directed Assessment (SDA) support payments in the first week of April following receipt of funds from TEO. The efforts and support of all VSS staff were acknowledged as key to achieving this task.

The volume of client calls was high in the period leading up to and following the SDA payments, but these have since normalised, and the early payment will have significant benefits with the lower associated resources required for call handling.

BG queried the number of fraud cases identified in relation to SDA payments. AW advised that 4 cases of fraud had been noted in the previous year, a number higher than the normal trend. VSS has been working to improve checks and controls around preventing such cases with access to better information through access to PRONI records and an agreement with the Coroner’s office. It was noted that the cases referenced had occurred before the new controls had been implemented and no new cases have since been observed. This is hoped to be indicative of the effectiveness of the new checks and controls in preventing fraudulent activity.

AW noted that VSS have implemented an action plan in 2025/26 to move the remaining recipients of cheque payments to BACS or other automated methods.

CEO Engagements

AW highlighted a number of engagements from the full list included in the report:

· Introductory meeting with new NIVCO (Northern Ireland Veteran’s Commissioner) David Johnstone in February 2025.

· Meeting with MLA Stewart Dickson, TEO Committee Member.

· Meeting with Trevor Douglas regarding Voices of the Troubles project.

· Meeting with various VSP groups through March 2025.

Discussions followed with queries from Committee Members.

BL queried the impact of welfare reform and how this could be addressed through the VSP funding call. AW advised that the welfare support provided by some groups had, over time, evolved into work under TPDPS as the same skill set was required for both. Recent changes to Universal Credit, PIP and Benefits may affect victims and survivors and change the nature of the support they require. Community Partners are under pressure from the increased numbers of victims and survivors seeking support, so VSS will look to provide assistance with welfare services where it is required.

E2 Budget Report

CP provided an update on VSS budget position. CP noted that all figures were draft at this time pending finalisation of VSS accounts during April 2025.

VSS received a final resource budget allocation of £20.171m during the January monitoring round. An easement of £239k was declared to TEO in February  which was able to be utilised at departmental level to offset pressures in the wider ringfenced allocation. The final agreed budget allocation was therefore £19.932m.

A preliminary overall underspend of 1% was noted across all funding streams, with each individual programme remaining within the 1.5% tolerance. Corporate expenditure was underspent due to salaries, lower costs accrued due to lower Board costs, IT, and training losses due to staff absences.

HIA is showing an underspend of 1.5%. Following substantial pressures on INP in the first half of the year, the second half saw a a shift of focus to support completion of applications for redress in advance of the 2^nd April deadline.

PEACEPLUS incurred £487k costs this year and is currently underspent against budget due to recruitment delays and timing of expenditure on staff training and development. Interim payments have been received from SEUPB against the initial claims to provide cashflow whilst awaiting appointment of the project controller to complete verification activity.

The PEACEIV scheme is due to close in the coming weeks and VSS are awaiting verification of the final claim period

BG queried the delays in recruitment causing underspends in staff salaries. VM advised that the staff restructure had been approved by TEO in May/June 2024, following which VSS has completed the planned recruitment activities successfully as of Jan 2025. 3 posts remain vacant, decisions on which will be made in the coming year, according to the needs of the business as they arise.

E3 Strategic Risk Register

VM shared updates and discussed the Organisational Risk Register.

7 risks remain open – 4 scored red, and 3 amber.

Risk STG76 was closed after the passing of the HIA redress application deadline. VSS continues monitoring for any after-effects. It is expected that a few cases may be reported from individuals that were not aware of the scheme or whose applications missed the deadline, but no systemic issues have been identified.

Risk STG50 pertaining to governance structures was re-written following the discussions at the January Board meeting. The score was updated to red, to reflect the increasing risk that governance structures cannot function at full efficacy over time without a full complement of Board members, and to give consideration to the upcoming requirements for Board member involvement in the VSP funding call, which will place further demands on existing members.

Risk STG77 was moved to amber from red, following the progress on the Business case and co-design, and the update from TEO that the business case does not need to go through a Department of Finance approval process. This risk score will be closely monitored as VSS await business case approval.

F       Quarterly Reports

AW shared updates and notified the committee that the Quarterly reports were still in draft given the end of the financial year, and compilation of final figures and positions. Overall, the majority of delivery targets have been achieved, with a small number partially achieved and awaiting final validation of results.

Sickness levels have been reported to be higher than previous years, with the overall figures skewed by the number of staff on long-term sick leave. Given the small size of the organisation, each instance of long-term sick leave has a significant impact on the overall percentages.  BG queried the processes in place for absence management, and AW confirmed that all absence is handled in accordance with VSS absence management policy which includes appropriate trigger points for review and the involvement of occupational health in long term sickness cases.

Discussions followed around the observed trends in sickness absences and how VSS compares against the NICS. BG requested that further analysis be completed regarding absence trends, including benchmarking against NICS or other ALBs, and understanding regarding the profile of absentees, including their length of service with the organisation. AW confirmed that further analysis would be undertaken and shared at the next Board session. AW also noted that the results of the recently completed VSS employee engagement survey could provide further insights into staff morale.

G       Internal Audit - Cavanagh Kelly

CMcH shared a summary of the Internal Audit Reports on the SDA Bereavement Scheme and Budget Management.

G1 SDA Bereaved Scheme

The SDA Bereaved Scheme received an audit score of “satisfactory”.

2 priority three recommendations were noted. VSS was reported as having strong arrangements in place for assessing and processing applications under the SDA Bereaved Scheme.

VSS management has accepted and responded to the recommendations made in the report.

G2 Budget Management

VSS received a “satisfactory” audit rating with no audit recommendations and one point for management noted.

VSS were noted to have clear, well-understood procedures in place for Budget Management.

G3 Internal Audit Planning

VM shared an update on internal audit planning for 2025/26. VSS management has considered areas for inclusion with Cavanagh Kelly based on the organisational risk register and new programme areas.

The following three areas are proposed for audit in the 2025/26 year:

· PEACEPLUS – first year of the project, it would be worthwhile to have an expanded audit.

· Corporate Governance

· MBMLW – A thematic review of MBMLW activities would provide a good level of assurance across all areas.

The floor was opened for discussion – No issues were raised and members were content with the proposed areas

AW advised that auditing 3 areas would allow for a more in-depth audit.

VM will now discuss the audit plan with Cavanagh Kelly before finalisation.

H         External Audit Update – NIAO

AA presented the Audit Strategy for the 2024/25 year.

It was noted that the audit fee for this year would be £43,700, following a 4% increase from the previous year’s fee.

There are two significant audit risks as follows:

· Management override of controls

· PEACEPLUS Funding

AA advised that VSS had already provided a paper to NIAO regarding the accounting treatment for PEACEPLUS transactions, and NIAO has found this to be satisfactory.

The Committee had no further questions regarding the audit strategy.

CL provided a verbal update on the results of interim testing. No material issues were noted. Minor issues had been raised regarding travel claims by funded organisations, and CL noted that VSS has already undertaken further training of groups in this regard.

I         Standing Agenda Items

I1      ARC Self-Assessment Action Plan

VM shared the action plan and sought comments against each item from members.

Under the VSS Climate change and ESG Action Plan three key areas of action were noted for consideration in designing the VSS organisational policy. It was noted the actions will be built into the organisational workplan.

I2      ARC Training Update and Requirements

          Noted.

I3      Audit recommendations

AS shared updates.

Two internal recommendations were actioned by VSS, and can be closed off by next year. No other significant movements were noted.

VM advised that in relation to the open audit recommendations associated with business continuity planning, the action plan for implementation of a new Business Continuity Management Policy and Procedures was now in place and being worked through.

I4      Gifts and Hospitality Update

The register was noted.

AW advised that he had declared acceptance of an invitation to attend the ICAI annual dinner with former colleagues. This invitation was accepted in a personal capacity and not in his role as the CEO of VSS.

I5      Compliance Update

AS updated the committee.

A higher rate of data incidents was recorded in the quarter than has customarily been observed. This was attributed to a better rate of reporting observed since the appointment of an individual to a post with specific responsibilities as DPO, sharing regular communications around data security and keeping VSS staff better informed and conscious of good data practices.

I6      Procurement Update Q2 24/25

CP updated the committee. Two new business cases were approved for the procurement of legal services and HR systems. An increase in procurement thresholds was notified on 6 March – VSS policies and procedures will be updated accordingly.

I7      FD/DAO updates from DoF Q4 2024/25

The committee noted the paper.

VM noted that two DAO updates in the quarter were of particular relevance to the Audit Committee, as they related to new Global Internal Audit Standards and a revised Code of Good Practice for Corporate Governance in Central Government Departments. VM noted that the ongoing work to update the VSS Corporate Governance Framework would take into consideration the updated code of good practice.

J        Any Other Business

J1     Conflict of Interest Policy

A new version of the Conflict of Interest policy was presented for ARC approval in line with best practice. VM provided an outline of changes to the Policy. Members had no comments and were content to approve the revised policy.

J2     2024/25 Self-Assessment Scheduling

AS will liaise with committee members to coordinate a self-assessment session.

AA noted that the checklist contained within the new NIAO Good Practice Guide for Effective Audit and Risk Assurance Committees should be used for the next self-assessment.

J3     NIAO Good Practice Guide for Effective Audit and Risk Assurance Committees

AW noted that as referred to by AA, a new NIAO Good Practice Guide for Effective Audit and Risk Assurance Committees had been published and should be reviewed by members.

K       Date of next meeting

The next meeting of the Audit and Risk Committee is scheduled to take place on 13 August 2025.