Financial Statements 2016 | Page 66

Internal control The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. Such a system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide the Governing Board with reasonable and not absolute assurance against material misstatement or loss. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks to the achievement of the Group’s strategic objectives. The process has been in place throughout the year to 31 March 2016 and up to the date of approval of the Financial Statements. The effectiveness of this process has been reviewed regularly by the Group Finance, Risk and Audit Committee which met four times in 2015/16. The main processes/policies which the Board has established, and which are designed to provide effective internal control, are summarised below: n Internal audit – the Board has delegated responsibility for overseeing the adequacy and effectiveness of the Group’s internal control system to the Group Finance, Risk and Audit Committee. The Group’s Internal Audit team reports directly to the Group Finance, Risk and Audit Committee. An annual assurance report is produced by the internal auditor summarising the systems audit programme and confirming that the Group has a satisfactory internal control system in place. Management assurances are received by the Group Finance, Risk and Audit Committee to confirm that recommendations have been implemented as agreed. Subsequent internal audit reviews are undertaken to check recommendations have been properly implemented. Quarterly Management Accounts are presented to the Committee for review and scrutiny. n Risk management – the Board and Group Finance, Risk and Audit Committee oversee the risk management cycle which governs the ongoing process of establishing and communicating responsibilities, identifying risks and providing a framework to enable the organisation to minimise losses and maximise opportunities. Strategic risks are identified through a continuous risk assessment exercise, whilst operational risks are identified through the internal audit and best value process. n External audit – the work of the external auditors provides assurance through the interim and final audit visits and the provision of an audit strategy, audit report and management letter. Regular meetings are held with the external auditors to provide an update on changes in the business and to discuss strategic and technical matters. n Quality manage ment systems – the quality of the Group’s management systems is acknowledged in its review by the Internal Auditor and Investors in People accreditation. The Group also complies with a number of other recognised ISO quality management systems. n Regulatory reports – the Group reports to the Homes and Communities Agency through a range of regulatory returns all of which were submitted on time. The Executive Board ensures that regulatory matters are dealt with promptly and efficiently, coordinates the self-monitoring system operated by the Board, and monitors compliance with performance standards. n Performance indicators – key performance indicator reports are produced regularly for the Group and are reported through the Executive Board to the various Boards/Committees. These reports include performance monitoring on housing management, care quality compliance, maintenance, development, customer satisfaction, staff and financial results. n Fraud – The Group has a rigorous approach to fraud as set out in the Fraud Strategy and Policy. An annual fraud report is reviewed by the Group Finance, Risk and Audit Committee. This includes an analysis of the fraud and losses register for the year and how surrounding controls have been improved. n The Group Finance, Risk and Audit Committee – This Committee meets with the members of the Executive team, the internal auditors and external auditors to review specific reporting and internal control matters and to satisfy itself that the systems are operating effectively. n The Renumeration Committee – This Committee is made up of the Group Board Chair and the subsidiary Chairs. 64 Accord Group