Meetings

ARAC (22-06) Paper 6 – Update on 2022-23 Financial Position and 2023-24 Budget

7.1 Nia Morgan’s update described the latest financial position for 2022-23, including details of the supplementary budgets. The paper had also outlined details of the 2023-24 budget, and Nia confirmed that this had been approved by Plenary on 16 November.

7.2 In response to questions from the Committee, Nia and Manon provided further details on the investment in Facilities which included essential building maintenance and strengthening a point of vulnerability identified by Security during a recent protest.

7.3 Arwyn also provided further details on the investment in tools for developing engagement with the electorate, which included a Customer Relationship Management system and online engagement tool. This would better facilitate engagement and ways of gathering evidence and consultation responses to inform the work of Senedd Committees, and capturing feedback on the experiences of visitors to the estate.

Oral update

8.1 Nia Morgan, Manon Antoniazzi and Ken Skates had recently given evidence at both Public Accounts and Public Administration Committee (PAPAC) and Finance Committee. Additional information, including copies of reports and the Commission’s responses had been shared with Committee members ahead of this meeting, on 8 November. The PAPAC report, which was expected by early December, would also be shared.

8.2 The Committee noted the positive Finance Committee Report in particular and had welcomed all the additional information sent to them. The Committee also thanked Nia for the briefings and support she had provided outside of the formal meetings. 

Action

·       Clerking team to circulate the PAPAC report when available.

Oral update

17.1 Nia confirmed that it was too early to confirm the final out-turn figure for 2021-22 and that there were no issues to note from the interim audit of the accounts. She advised of some additional pressures caused by late returns of financial information from some service areas.

17.2 Nia informed the Committee that the upgraded finance system went live as planned and was working as well as expected, with some minor issues which were being addressed.

17.3 In relation to the approved 2022-23 budget, Nia advised that a proposal for a  supplementary budget was due to be considered by the Commission on 9 May, before being presented to the Finance Committee. The 2023-24 budget strategy paper was also due to be considered by the Commission. In response to questions from Committee members around managing costs relating to inflation and increases in National Insurance, Nia advised that, whilst every effort had been made to absorb the additional costs, a request for a supplementary budget was now necessary. She added that any savings realised during the pandemic would be offset by the increase in inflation and utilities.  
 

17.4 Nia agreed to share papers with the Committee on the supplementary budget and 2023-24 budget strategy once considered by the Senedd Commission and Finance Committee.

17.5 The Committee requested an update on the district heating scheme. Ed was aware of some developments on infrastructure to support the scheme and noted that the go live date for the project was still to be confirmed. He agreed to provide the Committee with an update when available.
    

17.6 The Chair acknowledged the amount of effort that had gone into managing finances and planning budgets, especially as it was become increasingly difficult to plan for the future. He also noted that resource pressures would continue to be a theme of discussion for future years. He, and the Committee members, were also pleased that the new finance system was in place and working well. 

Actions

·      Nia Morgan to share papers with the Committee on supplementary budget and 2023-24 budget strategy once considered by the Senedd Commission and Finance Committee.

·      Ed Williams to provide an update to the Committee on the district heating scheme when available.

ARAC (22-01) Paper 10 – Finance Update

12.1 Nia introduced the paper which provided the usual finance update for the Committee.  In relation to the 2021-22 approved operational budget, the forecast out-turn position at the end of December was for an underspend of 1.0%, which was within the corporate financial target range of 0% to 1.5%. The remaining underspend acted as a contingency against an unexpected increase in the provision for accrued annual leave and any urgent requests for funding late in the financial year.

12.2 Nia highlighted that the 2022-23 budget did not reflect the impact of IFRS 16 (Leases) noting that, subject to no further delay on implementation from HM Treasury, the impact would be reflected in the Commission’s first Supplementary Budget for 2022-23.  Preparatory work would start in March/April 2022 on the 2023-24 budget strategy.

12.3 The Committee thanked Nia for the update and for the information she had shared out of committee.  Information on losses and special payment were noted by the Committee.

ARAC (22-01) Paper 12 – upgrade to Finance System

14.1 Nia’s final item was to update the Committee on the status of the project to upgrade the finance system and, at the request of the Chair, to focus specifically on mitigation of associated risks.

14.2 As Senior Responsible Owner for the project, Nia confirmed she was comfortable with the mitigations in place, including rigorous user testing and the contingency of reverting back to the existing system should issues arise to prevent the planned go live in April 2022.  She reminded the Committee that this was an upgrade as opposed to installing a totally new system which minimised some of the implementation risks.  Nia also advised that the software support partners used by the Commission had managed the original installation in 2017.  Having won the re-tender for the support contract in 2018, they would be managing the migration of data to the live environment and provide additional support if necessary after the go live date. 

14.3 To deliver the system upgrade, the Commission is reliant upon and will continue to work alongside its third-party developer partner. Through collaboration, both parties would ensure that lessons were learned from previous implementations.  To ensure that expectations on all sides were met there would be ongoing dialogue with the developers and close co-operation with Procurement colleagues to ensure there was strong contract management practices in place.

14.4 The Chair was satisfied with progress and mitigation of risks, noting the implications if implementation did not go to plan.  He also reiterated that Audit Wales would need access to the old system for the interim audit before the new system went live.  Gareth Lucey would work closely with Nia on this.

14.5 Gareth Watts highlighted that this system upgrade would be captured in his audit plan post-implementation. This would focus on reviewing the integrity of the data and migration as the coding structure would remain the same.

14.6 The Committee then discussed the issue of bilingual functionality of IT systems more generally.  Arwyn Jones advised that he was working with an organisation called the Centre for Digital Public Services in Wales and agreed to share details of membership with Ann Beynon and report back any necessary information to the Committee.

Action

·       Provide further details to Ann Beynon on the Centre for Digital Public Services (in relation to bilingual provision within IT systems)

ARAC (22-01) Paper 11 - Annual Review of Accounting Policies

13.1 Nia introduced the paper which outlined how the Finance team had carried out its annual review of accounting policies.  She referred the Committee to the Annex which outlined the points to note.  The review had covered external changes such as accounting standards, as well as changes to internal arrangements and the Audit Wales external audit report and management letter.

13.2 Nia confirmed that there were only minor changes which had implications for disclosure in the Commission’s 2021-22 accounts.  She noted that steps had already been taken to address the issue raised by Audit Wales during the 2020-21 audit, relating to items of capital expenditure.  Changes to the accounts reflecting IFRS 16 – Leases would be implemented during 2022-23.

ARAC (02-21) Paper 11 – Finance Update

12.1      Nia Morgan set out the latest financial position for 2020-21 and the anticipated financial position for 2021-22 and 2022-23. It was anticipated that the out-turn for the operational budget at year end would be 0.4% which was well within the target of between 0% and 1.5%.   

12.2      In response to questions from the Committee around the accrual of leave, Nia confirmed that the extended Christmas shut-down had reduced the annual leave provision figure required and the figure reflected in the accounts would be an accounting adjustment only.

11.1    Nia Morgan outlined the 2020-21 corporate financial target was to deliver an unqualified audit report and an end of year operational out-turn in the range of 0% to 1.5% of the approved operational budget. She confirmed that the forecast out-turn position at the end of January was well within this target at 0.4% of the approved operational budget. As the underspend remained tight, Executive Board and Leadership team would continue to assess project resource requests with a view to maintaining the low level of underspend until the end of the year. The piloting of different work space had been an additional unforeseen area of spend and it would be an item of expenditure budgeted for in future years, if the pilot was successful. 

11.2    The Public Accounts Committee recommended that the Senedd Commission remove any future KPIs that set to minimise under expenditure, and focus instead on using financial resources as efficiently as possible. Work would be undertaken during 2021-22 to develop proposals to discuss with the Commission appropriate corporate financial targets for the Sixth Senedd.

11.3    A second Supplementary Budget was approved by the Commission in December. As noted in the November meeting, part of this second Supplementary Budget was to increase the Annually Managed Expenditure (AME) budget from £1.6 million to £2.0 million to reflect the Actuary’s estimate of the increase in Members’ Pension finance costs. 

11.4    Nia then moved onto 2021-22 budget which related to the first year of the Sixth Senedd that would be overseen by a new Commission elected in 2021. With the delay to the implementation of International Financial Reporting Standard (IFRS) 16 (Leases) due to the impact of Covid-19 the 2021-22 budget had been presented without any IFRS 16 data. Further details on this can be found in paragraph 12.2.

11.5    The Committee thanked Nia for this update and noted the well-deserved praise and recognition from the Public Accounts Committee. The work undertaken to present the future budget was exemplary and Nia agreed to share information on any savings or additional spend due to the pandemic, with the Committee in due course.

Actions

·         Nia to share analysis of spend and savings in relation to Covid with ARAC at year end.

12.1    Nia presented this paper which outlined the annual review of accounting policies to ensure their continued relevance in supporting Senedd business. The Finance team used the latest information available from HM Treasury and worked with services across the Commission, identifying any significant changes. Areas reviewed included external changes such as accounting standard changes, internal business changes and the Audit Wales external audit report and management letter.

12.2    Although the review was on-going, there were no expected changes to the accounting standards that would need reflecting in the accounting policies applied by the Commission for 2020-21, apart from the International Financial Reporting Standard (IFRS) 16. Following a number of delays, HM Treasury confirmed in November 2020 that the Financial Reporting Advisory Board had agreed that there would be no mandatory implementation of IFRS 16 from 1 April 2021. Instead, the effective date would now be 1 April 2022. This further delay to its implementation will mean that IFRS 16 will not impact on the Commission’s budget until 2022-23. The Commission decided not to adopt IFRS early (in 2021-22). Subject to further guidance from HM Treasury, the impact will be reflected in the Commission’s Draft Budget for 2022-23 or its first Supplementary Budget for 2022-23.

12.3    The Committee thanked Nia and her team for their detailed review. He suggested that discussions with Audit Wales might be useful to minimise duplication of effort across Welsh public sector organisations for analysing changes to accounting policies and the Financial Reporting Manual (FReM).

ARAC (05-20) Paper 6 – Update on 2020-21 Financial Position and 2021-22 Budget

4          

5          

6          

7          

8          

8.1         Nia Morgan presented an update on the 2020-21 financial position. The Commission’s forecast out-turn equated to 0.5% of the approved operational budget which was within the target range of 0% to 1.5%.

8.2         Nia had shared links with Committee members in advance of this meeting to the Commission’s scrutiny sessions with the Senedd’s Finance Committee and Public Accounts Committee (PAC) with other related correspondence. One area on which the PAC requested further information was around the replacement of the windows in Tŷ Hywel. Nia explained that a feasibility study would be carried out for a phased approach, a decision on which was likely to be deferred until the new Commission was appointed. In response to Committee members urging early engagement with potential Welsh suppliers, Dave provided assurance this was being done.

8.3         Another area raised at the scrutiny sessions was the impact of accrued annual leave which would result in the need for a significant accounting adjustment. The Committee discussed the impact in terms of wellbeing of staff, particularly those unable to take leave due to work pressures. Nia advised that Heads of Services had been asked to encourage their staff to take leave over the Christmas period and a news page item would also be published.

8.4         The Committee thanked Nia and her team for their continued work over the summer and the ongoing effort to ensure that the 2020-21 financial position and 2021-22 budget was presented in such a comprehensive way.

ACARAC (02-20) Paper 9 – Update on financial position

9.1        Nia introduced the item, asking Committee members to note the latest financial position for 2019-20 and the anticipated financial position for 2020-21 and 2021-22. Nia explained that due to the timing of the meeting, it was not possible to provide an accurate 2019-20 year end position, but that these figures would be provided in due course.

9.2        Nia asked the Committee to note that a supplementary budget was being considered by the Commission, in relation to the delay in the implementation of changes to IFRS16 - Leases, which was due to come into force on 1 April 2020. This has been deferred to 1 April 2021. In response to questions from the Chair, Nia added that this change had a significant impact on the 2020-21 outturn, therefore a supplementary budget was required.

9.3        In response to questions about the calculation of the Commission staff annual leave provision, Nia provided assurance that this was not a significant issue but that accounting standards required this provision to be included in the resource accounts.

9.4        The Committee thanked Nia for the update.

ACARAC (01-20) Paper 7 - Update on 2019-20 Financial Position and 2020-21 Budget

7.1        Nia introduced the item, asking Committee members to note the current financial position for the 2019-20 financial year.

7.2        Nia highlighted the change in presentation of the budget to reflect that the Commission would no longer utilise any underspend arising from the Remuneration Board’s Determination budget to fund project work. The Committee were reassured to hear that, as this was the first year of presenting the budget in this way, it would be subject to ongoing review.

7.3        In response to questions on the increase in staff turnover percentages, Nia explained that this average brought the Commission in line closer to the public sector average and did not cause concern for senior management at this point.

7.4        The Committee questioned officials on the expenditure on the estate and the future of Tŷ Hywel. Dave informed the Committee that, under the current arrangements the level of investment was necessary to maintain the building.

7.5        Responding to questions around the value for money savings target, Nia indicated that this information was now collated for internal monitoring purposes only.

ACARAC (05-19) Paper 7 – Update on 2019-20 Financial Position and 2020-21 Budget

9.1        Nia talked Committee members through the paper, which set out the latest financial position for 2019-20 and provided an update on the work to approve the 2020-21 budget proposals.

9.2        The Chair thanked Nia for the update and the Committee noted the paper.

ACARAC (01-19) Paper 13 - Finance Update

11.1    In response to questions from the Chair, Suzy confirmed that the Determination budget was aligned with expectations of the Assembly’s Finance Committee and Public Accounts Committee. She also described how the Finance Committee recommendations had been taken on board. Suzy and Nia explained that they agreed in principle with the recommendation for   tracking the Welsh Consolidated Fund when setting the Assembly’s budget. However, the Committee noted the challenge here as the figures would not be available in time to set the budgets and that there was a potential reputational risk.

11.2    The Chair congratulated Nia and her team on the value for money and prompt payment performance. When asked, Nia confirmed that there had not been any significant variances against budgets set for programmes and projects.

11.3    Nia also highlighted that the increase in pension contributions may result in a supplementary budget for 2019-20.  The Finance Committee had been advised of this.

ACARAC (02-18) Paper 7 – Finance update

ACARAC (02-18) Paper 7 – Appendix A

6         

7         

8         

9         

9.1        Nia set out the latest financial position for 2017-18 and the anticipated position for 2018-19 and 2019-20.  She anticipated that, helped by robust spending prioritisation by the Executive Board, the Commission would be within the challenging target of 0.5% at the year end.

9.2        HMRC were currently undertaking an audit of the Commission’s pay arrangements which had required diverting some resources within the Finance team. The process would take between 12 and 18 months and was not expected to have an impact on the audit timeline.

9.3        The Committee discussed the implications for the Commission’s budget of the Finance Committee’s inquiry into the Remuneration Board’s Determination Underspend and the Remuneration Board’s consultation on proposals arising from the review of staffing support for Members.

9.4        The Committee thanked Nia for an excellent report.

ACARAC (01-18) Paper 5 – Review of accounting policies

Item 7 – Finance update

ACARAC (01-18) Paper 6 – Finance Update

5.0         

6.0         

6.1        Nia presented both papers and welcomed questions from Committee members on the latest financial position.

6.2        The Committee noted the paper on review of accounting policies. When questioned, WAO representatives confirmed they were content with the treatment of dilapidations outlined in the paper.

6.3        The current financial position remained challenging. However since the November meeting, Directors had been tasked with identifying savings, including delaying some expenditure until 2018-19 to provide a level of contingency and flexibility within 2017-18, whilst recognising this would impact on the 2018-19 budget. The Investment and Resourcing Board would shortly be considering whether some of those projects which had been put on hold, such as the cyclical replacement of some ICT hardware, could now go ahead in 2017-18. 

6.4        A prioritisation tool developed by Dave and Gareth Watts would aid with funding decisions going forward. The Committee requested an update on the basis for and application of the prioritisation criteria at the April meeting. 

6.5        Nia explained the need for a supplementary budget to cover the shortfall caused by an increase in the Government Actuary’s Department forecasting of the pension finance cost. An explanatory memorandum had been submitted to the Finance Committee in December.

6.6        Dave confirmed that savings had been negotiated on some contracts without any changes to standards of service. Nia made reference to the value for money savings from business efficiencies but cautioned that savings in areas such as procurement would be more difficult in the future unless there were significant changes to service delivery. In response to questions about the apprenticeship levy, Nia agreed to clarify whether the payroll of Members, as individual employees should be treated separately or cumulatively in relation to the £3 million threshold.

6.7        The Committee were invited to send any comments to Nia on a letter that was due to be sent to the Finance Committee following the launch of its inquiry into how other Parliaments budget for expenditure related to Member’s pay and allowances.       

Actions

-      Dave and Gareth Watts to update Committee on the basis for and application of the prioritisation criteria at the April meeting. 

-      Nia to clarify if the apprenticeship levy applies to the Assembly Members as employers.

ACARAC (05-17) Paper 11 – Finance Update

3         

4         

5         

6         

7         

8         

8.1        Nia asked the Committee to note the update which detailed the latest financial position for 2017-18 which was monitored by IRB on a fortnightly basis.

8.2        The Committee welcomed this comprehensive paper and appreciated the financial pressures the organisation was facing.

Actions

-         Nia to share details of budget modelling with Committee members.

ACARAC (02-17) Paper 13 – Finance and Budget update 

8      

9      

10      

11      

12      

12.1     Due to the early scheduling of this meeting, Nia was unable to provide the Committee with a year-end position as accounting adjustments were yet to be processed. 

12.2     A capacity planning meeting at Management Board would further inform demands on the 2017-18 budget which would also be closely monitored by IRB.   

Commission Governance 

6.0     Item 6 – Budget update  

Item 7 – Review of accounting policies 

ACARAC (01-17) Paper 7 – Finance and Budget Update 

ACARAC (01-17) Paper 8 - Accounting policies – annual review 

6.1        Nia Morgan presented both of these items.  The 2016-17 corporate financial targets had been reviewed and updated at a recent IRB meeting.  The target underspend for the year-end had been revised from 1.0% to 0.5% and prompt payment targets further tightened.  Nia also informed the Committee of some staff changes within the Finance team.

6.2        The revised underspend position of below 0.5% would be challenging but at a recent Management Board meeting Nia had emphasised to Heads of Service that the remaining weeks of the current financial year were a critical time for the management of the budgets in their service areas. The Committee highlighted the potential for such a target to increase the risk of overspend.

6.3        The Committee welcomed the annual review of accounting policies and thanked Nia for such a comprehensive paper.

12.0     2016-17 Budget update

ACARAC (05-16) Paper 16 – Finance update

12.1    Nia informed the Committee that the 1% target underspend was on track and she would work closely with the WAO to fully determine whether there were any capital implications for the works planned on the reconfiguration of Tŷ Hywel. 

11.0     Finance Committee (FC) and Public Accounts Committee (PAC) update

ACARAC (05-16) Paper 15 – FC and PAC update

ACARAC (05-16) Paper 15 – Appendix 1 Letter to PAC

ACARAC (05-16) Paper 15 – Appendix 2 Letter to FC

ACARAC (05-16) Paper 15 – Annex to FC Budget 2017-18

ACARAC (05-16) Paper 15 – Appendix 3 FC report

ACARAC (05-16) Paper 15 – Appendix 4 FC & PAC update

11.1    Nia Morgan thanked Suzy and the Committee for their assistance in preparing for the Finance and Public Account Committees.  She advised that two further responses were due to be sent to the Finance Committee.

11.2    The Committee welcomed the feedback and were pleased that the preparation had paid dividends.  

ACARAC (32) Paper 13 – Accounting Policies

11.1     The Committee noted this paper for information and Nia outlined minor amendments she had made. 

11.2     In relation to purchasing IT equipment as and when required, Dave assured the Committee that checks were made that prices were competitive.

ACARAC (32) Paper 12 – Budget Update

10.1     Nia presented a paper setting out the latest financial position for 2015-16.  The paper also included an update on the work to deliver future budgets. 

10.2     Some further detail was provided by Claire on the implications of the voluntary exit scheme and the wider plans to restructure some teams during the Fifth Assembly to ensure a positive impact as a result of the scheme.  The Chair commented that the process followed appeared to have been robust, with independent assurance built in.

10.3     Nia explained that a value for money saving target was not specified for 2016-17 as no major contracts were due for renewal but regular meetings with Estates and Facilities Management and ICT were likely to draw out some discrete savings or efficiencies.  Claire explained the role of Investment and Resourcing Board in making decisions about the best use of savings generated.

10.4     Nia also informed the Committee that a challenging few months lay ahead for her team with a new budget strategy likely to be presented to a new Assembly Commission in June.  

ACARAC (31) Paper 8 - Annual accounts 2015-16 

6.1        Nicola presented this paper and informed the committee that an interim set of accounts had been submitted to the WAO.  Following a workshop held by the WAO for Heads of Resources, she would have sight of interim accounts from other public sector bodies.  

6.2        Committee members questioned the treatment of AMSS holiday pay and Nicola confirmed she would update the committee once further progress had been made with the WAO.

6.3        The use of the Pierhead building was also discussed.  The building was well used and the event space fully booked until March 2018.  When questioned on the necessary work to maintain the building, officials confirmed that the forward work plan of maintenance for the next 10 years had been based on expert advice.

6.4        Overall, the committee were content with the update to the 2014-15 Management Letter and the timetable outlined in the paper.           

Action

-        Nicola to update the Committee on treatment of AMSS holiday pay in the accounts.

ACARAC (31) Paper 14 – Finance Update

12.1     Nicola presented this paper which set out the financial position for 2015-16. 

12.2     The Committee welcomed the inclusion of a letter sent by the Deputy Presiding Officer to the Chair of the Public Accounts Committee and praised the Assembly for its prompt payment performance.

ACARAC (30) Paper 10 – Budget Update

11.1     Nicola summarised the financial position for 2015-16 and confirmed that the 2016-17 budget had been approved by the Assembly.  The Finance Committee had scrutinised the budget thoroughly, with a greater level of challenge of some budget lines than previously, and all their recommendations had been accepted.  2015-16 procurement savings would be lower than in previous years due to lower value contracts expiring during this financial year.

11.2     Claire stated that this financial year was classed as a transitional year for the VfM approach.  A further capacity review was scheduled for the end of November.

11.3    The Chair requested an update on the Business Efficiency Review when appropriate.   

Action

-        Dave to update on the Business Efficiency Review when appropriate.

1.0     

2.0     

3.0     

4.0     

5.0     

6.0     

7.0     

8.0     

9.0     

10.0     

11.0     

11.1    The Committee were updated on the 2014-15 accounting policies review. External and internal changes had been reviewed to ensure continued relevance in supporting Assembly business.

11.2    Nicola mentioned that WAO had yet to confirm the disclosure for ICT asset treatment proposed but discussions were underway.  The Committee noted the training and guidance being offered to asset managers. Eric asked that this item be added to the Committee’s Forward Work Programme on an annual basis. 

Action

-     Clerking team to add review of accounting policies as an annual item on the Forward Work Programme.