Financial Statements 2020 | 25
Internal Control & Risk
Internal Control
The Board has overall responsibility for the 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 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 Accord ’ s strategic objectives . The process has been in place throughout the year to 31 March 2020 and up to the date of approval of the financial statements . The effectiveness of this process has been reviewed regularly by the Finance , Risk and Audit Committee which met four times in 2019-20 . The main processes and policies which the Board has established , and which are designed to provide effective internal control , are summarised below .
Internal Audit The Board has delegated responsibility for overseeing the adequacy and effectiveness of the internal control system to the Finance , Risk and Audit Committee . The Internal Audit team reports directly to the Finance , Risk and Audit Committee . A risk-based internal audit plan is prepared and subsequently approved by the Finance , Risk and Audit Committee . The Committee also receives an annual assurance report summarising the audit programme and confirming that a satisfactory internal control system is in place . Management assurances are received by the 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 .
Risk Management The Board and Finance , Risk and Audit Committee oversee the risk management process 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 .
External Audit The work of the external auditors provides assurance through the audit process 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 .
Quality Management Systems The quality of Accord ’ s management systems is acknowledged in its review by the internal auditor and external accreditations . The association also complies with a number of other recognised ISO quality management systems .
Regulatory Reports Accord reports to the Regulator of Social Housing 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 , co-ordinates the self-monitoring system operated by the Board , and monitors compliance with performance standards .
Performance Indicators Key performance indicator reports are produced regularly and are reported through the Executive and the Board . These reports include performance monitoring on housing management , care quality compliance , maintenance , development , customer satisfaction , staff and financial results .
Fraud Accord has a rigorous approach to fraud as set out in the Fraud Strategy and Policy . An annual fraud report is reviewed by the 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 .
The 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 . The committee regularly reviews its terms of reference to ensure they remain relevant and up to date . The committee also reviews its skillset to ensure membership remains appropriate . The Board receives an annual report from the Chair of the committee highlighting the work undertaken in the year .