NIAO Annual Report and Accounts 2022 - 2023 (Accountability Report)

Corporate Governance Report

The purpose of the corporate governance report is to explain the composition and organisation of the NIAO’s governance structures and outline how they support the achievement of our objectives.

Directors’ Report

The directors of the NIAO comprise the senior managers and the non-executive Board members, whose details are set out below.

NIAO Senior Leadership Team

The Senior Leadership Team (SLT) is responsible for the strategic and operational leadership of the NIAO. Subject to the C&AG’s statutory position as corporation sole and her primacy in setting strategy, policy and procedures, SLT is the principal mechanism for the direction and delivery of the business and for decision-making in the NIAO. SLT was established following a review of governance arrangements and the role of the Senior Management Team (SMT) in October 2022, replacing the previous SMT. Monthly minuted SLT meetings are chaired by either the C&AG or the COO and its membership over the reporting period was as follows:

• Dorinnia Carville - Comptroller and Auditor General
• Neil Gray (to 30 June 2023) - Director
• Colette Kane - Director
• Brian O’Neill - Director
• Seamus Wade (from 17 April 2023) - Director
• Rodney Allen - Chief Operating Officer
• Suzanne Walsh - Director
• Patrick Barr - Director
• Tomas Wilkinson - Director

NIAO Senior Management Team

SMT was the principal mechanism for directing the business and decision-making in the NIAO. This team was chaired by the C&AG and its membership up to October 2022 was as follows:

• Dorinnia Carville (from 1 August 2022) - Comptroller and Auditor General
• Kieran Donnelly CB (until 31 July 2022) - Comptroller and Auditor General
• Neil Gray (to 30 June 2023) - Director
• Colette Kane - Director
• Brian O’Neill - Director
• Rodney Allen - Chief Operating Officer
• Suzanne Walsh - Director
• Patrick Barr - Director
• Tomas Wilkinson - Director

C&AG’s Advisory Board

The Advisory Board is responsible for providing objective and impartial advice to the C&AG to assist her in the discharge of her functions and works in partnership with the C&AG and the SLT. The Advisory Board scrutinises the work of the NIAO in the five areas of strategic clarity, commercial sense, talented people, results focus and management information. It also scrutinises and advises on Office finances on an ongoing basis.

The Advisory Board comprises both executive and non-executive members, the latter bringing an independent and external perspective to the work of the Board. Under current arrangements, the Chairperson of the Advisory Board is appointed by the C&AG through open competition, based on merit, following endorsement by the Northern Ireland Assembly Audit Committee (NIAAC). Non-executive members are similarly engaged and will be members of the Advisory Board.

Each non-executive member is appointed for a three year period, which may be extended for a maximum of a further three years by the C&AG with the endorsement of the NIAAC.

These arrangements have been revisited following the review of “Governance and Accountability Arrangements for the NIAO [and the Northern Ireland Public Services Ombudsman]” conducted by the NIAAC. This report produced 16 NIAO-related recommendations including the esconducted by the NIAAC. This report produced 16 NIAO-related recommendations including the establishment of the NIAO as a body corporate in the form of a statutory board, the establishment of a code of practice between the statutory board and the C&AG and, in advance of these arrangements, the updating of the current Memorandum of Understanding to reflect organisational changes.

In 2022-23, the Advisory Board’s membership was as follows:

Martin Pitt Advisory (Board Chairperson)

In December 2018, Martin Pitt was appointed as the Chairperson of the Advisory Board for an initial three-year period to December 2021 and has subsequently been appointed for a further three-year period to December 2024. He was previously a partner within PwC’s Audit and Assurance Team and Head of Internal Audit, bringing with him over 30 years’ experience working with public and private sector bodies across the UK. Throughout his career, he has advised organisations on issues relating to corporate governance and risk management.

Rodney Allen (Chief Operating Officer)

Rodney Allen, as Chief Operating Officer has responsibility for both leading and managing the NIAO’s operational business and supporting the C&AG in the strategic leadership of the NIAO, including stakeholder management. He is responsible for cultural change within the NIAO, and for developing greater flexibility in management structures and service delivery.

Two non-executive members, initially appointed in April 2019, have been re-appointed to the Advisory Board for a further three-year period. effective from 1 April 2022. One non-executive member joined in 2022 and has since departed to take up an alternative post in the public sector. In our ongoing engagement with the “Boardroom Apprentice” programme, we also have appointed an apprentice member to the Board.

Marie Mallon OBE

Marie Mallon (OBE) is a member of the Board of the Northern Ireland Transport Holding Company and is an associate of the Health and Social Care Leadership Centre. Marie has also held the position of Chair of the Labour Relations Agency as well as Chair of the Public Sector Chairs’ Forum. Prior to that, she was Director of HR and Deputy CEO of Belfast Health and Social Care Trust for seven years, having previously held the position of Director of HR with the Royal Hospitals Trust. Mrs Mallon is a Chartered Fellow of the Chartered Institute of Personnel and Development (CIPD) and obtained a distinction in her MSc in HR Leadership from University of Manchester. In 2022 she was awarded an OBE for her services to industrial and employment relations in Northern Ireland.

Terry McGonigal (from 1 July 2022 to 5 January 2023)

Terry McGonigal is a Fellow of the Chartered Association of Certified Accountants (FCCA) and a Fellow of the Chartered Institute of Personnel and Development (FCIPD). He holds Masters Degrees in Business Administration and in Public Sector Innovation Management. With over 30 years’ experience working in the public sector, Terry is an experienced Finance Director and has a strong track record of providing leadership and direction for major ICT-led Change programmes, to improve the efficiency and effectiveness of finance and other corporate functions. Terry also has significant experience in supporting the work of public sector Boards and Audit Committees, both in an executive and non-executive capacity, and has a breadth of experience in developing and strengthening corporate governance arrangements to ensure compliance with best practice. Terry is also a member of the Board of Governors for Malone College and an Independent Member of the Audit Committee for the NI Public Sector Ombudsman.

John Turkington

John Turkington is Principal of Turkington Chartered Accountants and previously held senior roles in Ulster Bank as Director of Corporate Banking, Director of Property Banking and Regional Director of Commercial Banking. More recently, he held an all-island role as Head of Ulster Bank’s Specialised Relationship Management division. He is a graduate of Queen’s University, Belfast (Law and Accounting) with a post-graduate Diploma in Accounting and is a Fellow of Chartered Accountants Ireland.

Chantelle Reynolds

Chantelle Reynolds joined us as a Boardroom Apprentice in our first year as a host board with the scheme. Over the term of her appointment Chantelle was supported by our SLT in order to gain practical board experience as part of her programme. Chantelle is a Management Accountant with the Hannaway Corporate Advisory Group in Belfast. She has over 20 years of Commercial Finance experience, having enjoyed the majority of her career as Group Accounts Manager for a chain of retail stores. Chantelle made the move to practice and quickly specialised in Charity Accounting, managing the accounts for a variety of high profile trusts, charities and social enterprises.

NIAO Audit and Risk Assurance Committee

The C&AG, as the Accounting Officer of the NIAO, is responsible for ensuring that there are effective arrangements for governance, risk management and internal control.

The Advisory Board supports the C&AG in this role by reviewing the comprehensiveness and reliability of assurances on governance, risk management, the control environment, and the integrity of financial statements and the annual report.

To provide support in these functions, the Board appoints an Audit and Risk Assurance Committee to review the comprehensiveness of assurances on systems of internal control, risk management and corporate governance. The Audit and Risk Assurance Committee is independent of all NIAO operational activities.

The membership of the Committee is:

• John Turkington (Chairperson)
• Marie Mallon OBE
• Terry McGonigal (from 1 July 2022 to 5 January 2023)

Register of interests

None of the non-executive or executive members of the Office’s governance structures in 2022-23 held company directorships or significant interests which might conflict with their responsibilities. Also, none had any other related party interests.

Auditor of the NIAO

The Department of Finance re-appointed Baker Tilly Mooney Moore as the external auditor of the NIAO for a three-year term commencing with the audit of the 2018-19 accounts. In 2021-22, it decided to take up the option to extend the contract by a further two years.

Details of the cost of the work done by the external auditor are disclosed in Note 4 to the Financial Statements.

Disclosure of relevant audit information

The C&AG has taken all the steps that she ought to have taken to make herself aware of any relevant audit information and to establish that the auditors are aware of that information. So far as the C&AG is aware, there is no relevant information of which the auditors are unaware. The C&AG has taken personal responsibility for the annual report and accounts and the judgments required for ensuring they are fair, balanced and understandable.

Personal data-related incidents

There were no protected personal data-related incidents which required reporting to the Information Commissioner’s Office (ICO).

Complaints

We have a complaints process in place to ensure that complaints from both clients and the public are dealt with in a timely, open and fair way, in line with public sector good practice. The process has three stages, the details of which can be found on our website. If a complainant remains dissatisfied following the outcome of these three stages, they may refer the matter to the Northern Ireland Public Services Ombudsman’s Office (NIPSO), in accordance with the Northern Ireland Public Services Ombudsman Act (Northern Ireland) 2016.

During 2022-23, we received two complaints, each of which was addressed in-house.

Further information on the monitoring of complaints can be requested from:

Information Manager 
Northern Ireland Audit Office 
106 University Street, 
Belfast, 
BT7 1EU

Tel No 028 9025 1097

Health and Safety

Our health and safety policy is made available to all staff.

No incidents were recorded during 2022-23 and no report to the Health and Safety Executive for Northern Ireland under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations was required.

All staff have access to an independent and confidential counselling, support and advice service. This counselling support is free to staff at the point of use and is totally external to the Office.

Statement of Accounting Officer’s Responsibilities

Under Article 6(3) of the Audit (Northern Ireland) Order 1987, the NIAO is required to prepare, for each financial year, resource accounts of the kind mentioned in Section 9 of the Government Resources and Accounts Act (Northern Ireland) 2001, detailing the resources acquired, held or disposed of during the year and the use of resources by the NIAO during the year.

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the NIAO and of its income and expenditure, Statement of Financial Position and cash flows for the financial year.

In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual and in particular to:

• observe the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
• make judgements and estimates on a reasonable basis;
• state whether applicable accounting standards, as set out in the Government Financial Reporting Manual, have been followed, and disclose and explain any material departures in the accounts;
• prepare the accounts on a going concern basis; and
• confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable, and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.

Under the Audit (Northern Ireland) Order 1987, the Department of Finance has appointed the C&AG for Northern Ireland as Accounting Officer for the Northern Ireland Audit Office.

The C&AG for Northern Ireland’s relevant responsibilities as Accounting Officer, including responsibility for the propriety and regularity of the NIAO’s finances for which she is answerable, for the keeping of proper records and for safeguarding the NIAO’s assets, are set out in Managing Public Money Northern Ireland, published by the Department of Finance.

As the Accounting Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the NIAO’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

Governance Statement

Introduction

As Accounting Officer for the NIAO, I have responsibility for maintaining effective governance and a sound system of internal control that supports the achievement of the NIAO’s policies, aims and objectives, while safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Managing Public Money Northern Ireland.

Structure of governance

The NIAO’s governance structure reflects the statutory position of the C&AG, as set out in two key pieces of legislation:

• The Audit (Northern Ireland) Order 1987 provided for the office of C&AG to be a corporation sole and established the NIAO to assist the C&AG in the discharge of her statutory functions.
• The Northern Ireland Act 1998 requires that, in exercising her functions, except for any function conferred on her of preparing accounts, the C&AG shall not be subject to the direction or control of any Minister or Northern Ireland department or the Assembly. Accordingly, the C&AG has complete discretion in the discharge of her statutory audit functions, with responsibility for the programme of audit work, all audit opinions and judgements resting with her alone.

As the holder of this office, I have primacy in determining the strategy, staffing and structure of the Office and am responsible for designing and implementing the internal governance arrangements to support the delivery of my statutory functions. In so doing, I seek to comply with the spirit of the ‘Corporate governance in central government departments: Code of good Practice NI 2013’ (“the Code”) issued by the Department of Finance. I accept the tenets of the Code as constituting best practice, however the specific legal constitution of the office of C&AG as a corporation sole means that I cannot directly apply the 2013 Code arrangements to the NIAO. In particular, there is no provision in legislation for the establishment of a board.

This will be addressed through the Northern Ireland Assembly Audit Committee (NIAAC) who published a report on the “Review of the Governance and Accountability Arrangements for the Northern Ireland Audit Office and the Northern Ireland Public Services Ombudsman” in January 2022. This report includes 16 recommendations directly related to the NIAO, including the future tenure of the C&AG, the appointment of a single auditor for the public sector, the establishment of the NIAO as body corporate in the form of a Board, and the appointment of non-executive members of the NIAO statutory board by NIAAC.

The outworkings of many of these recommendations will require legislation; however others, such as the strengthening and updating of the current memorandum of understanding between my Office and NIAAC to reflect organisational changes, can be addressed following the return of the NI Assembly.

Overall I am content that the current NIAO governance arrangements are compliant with the Code on an appropriate and proportionate basis.

Components of governance structure

NI Assembly Audit Committee (NIAAC)

I am accountable to the Northern Ireland Assembly via the NIAAC, which has the role defined in section 66 of the Northern Ireland Act 1998. Under current arrangements, the NIAAC’s responsibilities include: examining the NIAO Estimate and laying it before the Assembly; considering the NIAO’s Corporate Plan; examining the NIAO Annual Report and Accounts and reports received from the external auditor; providing advice to the Department of Finance on the appointment of the NIAO external auditor; and tabling a motion in the Assembly in respect of the salary of the C&AG. This will be extended as the recommendations of the NIAAC Committee report are implemented; the governance structures will also change. However, until the return of the NI Assembly and the implementation of the NIAAC recommendations, the key elements of the internal governance arrangements of the Office are as set out below. Further information on these, including minutes of meetings, are available on our website.

Advisory Board

The Advisory Board is responsible for providing objective and impartial advice to the C&AG to assist her in the discharge of her functions and works in partnership with the C&AG and the Senior Leadership Team. The Board scrutinises the work of the NIAO in the five areas of strategic clarity, commercial sense, talented people, results focus and management information, as set out in ‘Corporate governance in central government departments: Code of good practice NI 2013’ issued by DoF, with the objective of providing constructive challenge. It also scrutinises and advises on Office finances on an ongoing basis.

The Advisory Board comprises both executive (the C&AG and the COO) and non-executive members, the latter bringing an independent and external perspective to the work of the group.

Each member is appointed for a three-year period, which may be extended by the C&AG, with the endorsement of the NIAAC. During 2021-22, the initial three-year tenure for all of our non-executive members was coming to an end. However, following consultation with the NIAAC, it was agreed to extend the term of the Chair and two of the three non-executive members by a further two years. A further non-executive member was appointed in-year to maintain membership levels.

During 2022-23, the Advisory Board met four times. The attendance at each of these events is recorded below:

In addition, other officials of the Office attended, as required, to assist with the discussion of agenda items. The Office’s corporate secretariat provided it with an appropriate support service.

Audit and Risk Assurance Committee

The Advisory Board supports me in my role, as Accounting Officer, in my responsibility for issues of risk, control and governance, by reviewing the comprehensiveness, reliability and integrity of assurances. This includes supporting and advising me on the planned activity and results of both internal audit and external audit (see page 62 and the adequacy of management’s response to issues identified by audit activity, including external audit’s management letter).

To provide support in these functions, the Board has established an Audit and Risk Assurance Committee (ARAC). ARAC comprises three non-executive members of the NIAO, excluding the NIAO Board Chairperson, who may attend, by invitation, if required. The Chairperson of ARAC, appointed by the Board Chairperson, was John Turkington.

During 2022-23, the Committee met four times and also held a workshop on horizon scanning for unexpected risk. The attendance at each of these events is recorded below:

The meetings were attended by Kieran Donnelly CB (up to 31 July 2022), Dorinnia Carville (from 1 August 2022), Rodney Allen and other NIAO staff.

ARAC remains independent of all NIAO operational activities; under its terms of reference it will meet at least four times a year. The Chairperson of the Committee may convene additional meetings, as deemed necessary. It may request the attendance of officials of the Office to assist with its discussions on any particular matter.

On behalf of ARAC, the Chairperson provides me with an annual report summarising the Committee’s work for the year. ARAC is satisfied that it has fulfilled its duties as guided by its Terms of Reference and taking account of the work of internal and external audit and assurances provided to the Committee, every effort was made to review and oversee internal control and risk management arrangements and to provide assurances to me, as Accounting Officer, in the discharge of my accountability obligations.

Based on its work for the year, ARAC has provided me with constructive feedback on what it views to be the risks, challenges and opportunities for the NIAO, as well as an indication of its intended areas of focus in 2023-24.

Remuneration Committee

The Remuneration Committee met three times in 2022-23. It comprises all non-executive Board members of the NIAO and supports the Board in advising me on issues including terms & conditions of employment, job descriptions, pay settlements and succession planning. It may also advise on issues relating to structural change exercises such as organisational development, job evaluation and role reviews. Attendance at the meetings was as follows:

Each meeting was attended by Rodney Allen (COO) and other NIAO staff.

Senior Management Team (SMT)

The SMT comprised the C&AG, as Chair, the Chief Operating Officer and six Directors. It was responsible for the strategic and operational leadership of the Office until it was stood down in September 2022 and was replaced by the Senior Leadership Team.

The SMT met six times during this period, where there was over 90 per cent attendance by members. Relevant non-members were invited to attend these meetings in relation to items such as office accommodation, office finances, risk management, developments in the Office’s branding strategy, data analytics, recruitment and the Business Transformation Programme (BTP). During the term of the SMT, the BTP Phase II continued to progress under 12 separate work streams.

Senior Leadership Team

The Senior Leadership Team (SLT), which replaced the Senior Management Team in October 2022, comprises myself, as Chair, the Chief Operating Officer and six Directors. The SLT normally meets on a weekly basis. In the monthly four week cycle, the week three meeting reviews and formally endorses the activities set out in the business meetings against the achievement of the corporate strategic priorities.

The SLT assists the C&AG in the delivery of the key business areas of the Office and, based on the proportionate application of the ‘Corporate governance in central government departments: Code of good practice NI 2013’, its responsibilities are: Strategic Projects; Strategic Performance; People and Organisational Development; Financial Management; Corporate Governance; Communication and Engagement; Risk Management; Audit Technical; and Escalation Assessment.

The SLT, which has met 20 times since its establishment, covers normal scheduled business, with 90 per cent attendance by members at the week three meetings. Relevant non-members are invited to attend these meetings. Over the course of the year, attendance took place in relation to items such as office accommodation, office finances, risk management, developments in the Office’s branding strategy, data analytics, recruitment and the completion of the Business Transformation Programme (BTP).

Since its inception, SLT has closely overseen the outworkings and implications of International Standard on Auditing: ISA 315 (Revised), Identifying, and Assessing the Risks of Material Misstatement, ISA (UK) 600 (Revised September 2022) Special considerations—Audits of group financial statements (including the work of component auditors) and the implementation of the Review of Financial Processes.

Risk management and control

Our approach to risk management is guided by professional best practice and takes full cognisance of the context and environment in which we operate. I have reviewed the risk management process in place during the year and can confirm that it complies with all the principles included within the revised Orange Book: Management of Risk – Principles and Concepts (2023).

Because of our public profile and the very nature of our work, we must uphold the highest standards in our own operations and be able to stand the test of independent scrutiny and retain our credibility and reputation with the Assembly, audited bodies and other stakeholders. At the same time, we must ensure that we promote and secure value for money in our use of public funds.

We focus on proportionate risk management as an integral part of the way we undertake business activities. Risk is managed in a structured way, taking on board the combination of the likelihood of something happening and the impact which arises if it does actually happen, to assess the inherent risk. We then set out the actions, if any, we take to constrain the risk to an acceptable level in accordance with our risk appetite. I am responsible for determining the risk appetite of the Office, which I review on an ongoing basis. To this end, I have agreed a definition for the appetite of each risk in consultation with both the SLT and ARAC.

The risk that remains, taking on board these actions, is our residual risk. In applying these principles, we are accurately assessing the relative significance and prioritisation of each risk. We have a comprehensive risk management strategy which sets out roles and responsibilities and determines procedures for risk identification, monitoring, reporting and escalation of issues.

As in previous years, we have continued to manage risk through an assurance framework which I consider to be proportionate to the size and the complexity of our business.

The Assurance Framework is a key tool for ARAC in fulfilling its responsibility to ensure that the Office is effectively managing its inherent risks within risk appetite. Within the assurance framework the three lines of defence have a common objective, i.e. to help the organisation achieve its strategic and corporate objectives through effective management of risks, and have been defined as follows:

• the first line of defence is the internal control environment which identifies the policies, procedures and processes put in place by management;
• the second line of defence is management’s own monitoring and risk assurance processes – this includes reviewing of targets and KPIs, operational management reporting, financial management accounts, quality assurance reviews and other reports issued to senior management; and
• the third line of defence is independent assurance provided by external sources. Given that we are a small organisation, we have also included external audit and other independent reviews in this category.

Through the adoption and implementation of the framework, the Office has a better understanding of its risks and what it is doing to mitigate these. By feeding into the corporate planning process, the framework can assist in the establishment of clear approved strategic objectives. It also identifies the key internal and external risks and whether they have been sufficiently addressed, the primary controls in place to manage the risks, any gaps in controls, management actions to close the gaps, and sources of assurance, both internal and external. 

During 2022-23, Risk Management was a standing agenda item at all meetings of the SLT and ARAC. The Corporate Risk Register Working Group (the Working Group), which is responsible for directly briefing the SLT and, by extension, ARAC on risk management developments, met four times in 2022-23. The timing of its meetings ensured that all requirements of the SLT and ARAC were addressed on a timely basis.

The corporate risk register aligns to our current Corporate Plan 2021-24, and during 2022-23 we identified three key areas of risk:

• supporting and promoting public sector accountability and improvement;
• valuing our people and managing resources; and
• transforming our business (external and internal).

I am content that the risk management process is appropriate, risks identified are relevant and have been managed during the year.

Quality

How we have addressed quality is set out in the performance analysis section of this Annual Report.

Other areas of focus

Statement of information risk

We have privileged and wide-ranging access to data and information to support the discharge of my statutory audit functions and ensure my reports to the Assembly are factual, accurate and complete. We have a duty to respect this privileged access and to ensure that the personal information entrusted to us is safeguarded properly.

We have policies and controls in place to ensure that access to information is correctly managed and safeguarded throughout its life cycle, including creation, storage, transmission and destruction. Staff are made aware of these policies and controls, and awareness is reinforced through information security training.

My Office is cognisant of the General Data Protection Regulation (GDPR) and the enabling legislation (Data Protection Act 2018) and has established an effective compliance framework. As a result, I:

• have staff trained through e-learning;
• conduct annual reviews of the Office’s auditing software to ensure that no excessive personal data is retained following audit completion;
• maintain an information assets register; and
• have an up-to-date Data Protection Policy in place.

Information risk is covered by the normal risk management arrangements. I am responsible for ensuring information risks are assessed and mitigated to an acceptable level and am supported in this role by the Senior Information Risk Owner, a member of the Senior Leadership Team, and various staff members with security responsibilities.

Review of effectiveness

As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control.

My review is informed by the work of the Internal Auditor and the executives within the NIAO who have responsibility for the development and maintenance of the internal control framework, comments made by the External Auditor in their management letter and other reports, and issues raised by ARAC.

Key risks which could affect the achievement of the Office’s objectives are managed actively under the risk management arrangements described above, with progress reported regularly to ARAC.

Internal Audit provides an independent opinion on the adequacy and effectiveness of the Office’s system of internal control, corporate governance and risk management. It reviewed a number of areas during 2022-23 including:

• Office Expenses;
• Governance and Risk Management;
• IT Disaster Recovery and Business Continuity Plan; and
• Digitisation

All areas received a satisfactory rating, and all recommendations for improvement have been accepted by management and implemented or are in the process of being implemented.

Based upon the reviews performed during the year, Internal Audit has provided a conclusion as to the adequacy and effectiveness (or inadequacy and ineffectiveness) of the Office’s risk management, control and governance processes. In its opinion, there is a satisfactory system of governance, risk management and control.

Significant internal control weaknesses

I am able to report that there were no significant weaknesses in the NIAO’s system of internal control in 2022-23 which affected the achievement of the Office’s key policies, aims and objectives.

Dorinnia Carville 
Comptroller and Auditor General for Northern Ireland
30 June 2023

Remuneration and Staff Report

Remuneration Policy

Comptroller and Auditor General

Under the provisions of the Northern Ireland Act 1998, the office of the C&AG for Northern Ireland is a Crown appointment made on the nomination of the Northern Ireland Assembly. The C&AG for Northern Ireland retains office unless removed by a resolution of the Northern Ireland Assembly supported by at least two-thirds of members. The Audit (Northern Ireland) Order 1987 provides for the remuneration of the C&AG for Northern Ireland to be met from the Consolidated Fund for Northern Ireland, rather than the NIAO’s Estimate. The remuneration and associated pension and national insurance contributions are disclosed in Note 4 to the Accounts on page 107 as Consolidated Fund Standing Services.

Senior Management

The Audit (Northern Ireland) Order 1987 provides that the C&AG shall appoint such staff as she considers necessary for assisting her in the discharge of her functions and for the purpose of Article 4 of the Local Government (Northern Ireland) Order 2005 as amended (designation of a member of staff as the Local Government Auditor).

The Audit (Northern Ireland) Order 1987 further provides that these staff shall be appointed at such remuneration and on such other terms and conditions as the C&AG shall determine, subject to her having regard to the desirability of keeping the remuneration and terms and conditions broadly in line with those applying to the persons employed in the National Audit Office and in the Northern Ireland Civil Service.

Staff appointments are normally open-ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme (Northern Ireland).

Appointments to senior management are made by the C&AG on the basis of fair and open competition. When holding competitions and making appointments, the C&AG takes into account the Northern Ireland Civil Service policies and procedures in this area.

Pay progression for all staff, including senior management, solely relates to an incremental pay scale step, where appropriate. The pay award involves a minimum percentage uplift in gross terms which is awarded to staff.

Remuneration (including salary) and Pension Entitlements

The following sections provide details of the remuneration and pension interests of the NIAO’s Senior Leadership Team (SLT). The information on pages 76 to 82 is covered by the audit opinion.

Remuneration (including salary) and pension entitlements Officials (Audited)

The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation and any increase or decrease due to a transfer of pension rights.

Neil Gray retired on 30 June 2023 and Seamus Wade took up post on 17 April 2023.

Salary

‘Salary’ includes gross salary and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the NIAO and thus recorded in these accounts.

Bonus payments

No bonus payments are made to staff.

Benefits in kind

The monetary value of benefits in kind cover any benefits provided by the Office and treated by HM Revenue and Customs as a taxable emolument. No such benefits were provided during 2022-23.

Fair Pay Disclosures (Audited)

Pay Ratios

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid member of the SLT in their organisation and the lower quartile, median and upper quartile remuneration of the organisation’s workforce.

The banded remuneration of the highest paid director in the NIAO in the financial year 2022-23 was £150,000-155,000* (2021-22: £185,000 - £190,000). This is the full time equivalent of the C&AG’s salary in 2022-23.

The relationship between the mid-point of this band and the remuneration of the Office’s workforce is disclosed below.

Total remuneration includes salary and benefits-in-kind. It does not include severance payments, employer pension contributions or the cash equivalent transfer value of pensions.

For 2022-23 the 25th percentile, median and 75th percentile remuneration values consisted solely of salary payments.

In 2022-23 no (2021-22: no) employees received remuneration in excess of the highest paid member of the SLT.

Remuneration ranged from £19,121 to £154,527 (2021-22: £18,348 to £189,403). The lower range for the prior year has been restated and now includes annualized figures which are considered more accurate.

The C&AG’s role is the highest paid position in NIAO. Using the full-year equivalent he/she was the highest paid member of the SLT during 2022-23. Her full-year equivalent salary was in the range £150,000 to £155,000 (2021-22: £185,000 to £190,000). This was 3.7 times (2021-22: 4.7) the median remuneration of the workforce which was £41,142 (2021- 22: £39,944).

The 2021-22 salary of the previous C&AG, Kieran Donnelly CB included a one-off, retrospective pay award covering the period from 2017 to 2022 legislated by the Northern Ireland Assembly in March 2022.

Percentage Change in Remuneration

Reporting bodies are also required to disclose the percentage change from the previous financial year in the:

1. salary and allowances; and
2. performance pay and bonuses

of the highest paid member of the SLT and their employees as a whole.

The percentage changes in respect of the NIAO are shown in the following table. It should be noted that the calculation for the highest paid member of the SLT is based on the mid-point of the band within which their remuneration fell in each year.

No performance pay or bonuses were payable to the highest paid individual in these years.

The percentage increase in the average employee remuneration is primarily due to an increase in staff appointments at more senior grades during 2022-23.

Non-Executive Members

During 2022-23, the following remuneration was payable to non-executive members in undertaking their NIAO Advisory Board and Audit and Risk Assurance Committee duties:

Terry McGonigal was appointed for a period of three years up to July 2025. He resigned on 5 January 2023.

Noel Hyndman ceased to be a member of the NIAO Advisory Board and ARAC at the end of his contract on 31 March 2022.

Fergus Devitt was appointed for a period of three years from 8 June 2023.

Pension Benefits - Officials (Audited)

CETV = Cash Equivalent Transfer Values. CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2023. HM Treasury published updated guidance on 27 April 2023; this guidance will be used in the calculation of 2023-24 CETV figures.

**The previous C&AG, Kieran Donnelly CB, chose not to be covered by the Northern Ireland Civil Service Pension Scheme in 2022-23 and 2021-22.

Pension Arrangements

The Audit (Northern Ireland) Order 1987 provides for pensionable service by the C&AG for Northern Ireland to be covered by the Northern Ireland Principal Civil Service Pension Scheme (PCSPS (NI)) which is non-contributory and unfunded. The Order also provides for defined pension benefits to be met from the Consolidated Fund for Northern Ireland and no liability rests with the NIAO.

Pension benefits are provided through the Northern Ireland Civil Service pension schemes which are administered by Civil Service Pensions (CSP).

The alpha pension scheme was initially introduced for new entrants from 1 April 2015. The alpha scheme and all previous scheme arrangements are unfunded with the cost of benefits met by monies voted each year. The majority of members of the classic, premium, classic plus and nuvos pension arrangements (collectively known as the PCSPS (NI) also moved to alpha from that date. At that time, members who on 1 April 2012 were within 10 years of their normal pension age did not move to alpha (full protection) and those who were within 13.5 years and 10 years of their normal pension age were given a choice between moving to alpha on 1 April 2015 or at a later date determined by their age (tapered protection).

McCloud Judgment

In 2018, the Court of Appeal found that the protections put in place in 2015 that allowed older workers to remain in their original scheme, were discriminatory on the basis of age. As a result, steps are being taken by the Department of Finance to remedy those 2015 reforms, making the pension scheme provisions fair to all members. Some active members will have seen changes from April 2022.

The remedy is made up of two parts. The first part was completed last year with all active members now being members of alpha from 1 April 2022, this provides equal treatment for all active pension scheme members.

The second part is to put right, ‘remedy,’ the discrimination that has happened between 2015 and 2022. We are currently working on new scheme regulations and processes in readiness for this.

It is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period. The different pension benefits relate to the alternative schemes e.g. legacy PCSPS(NI) ‘Classic’, ‘Premium’ or ‘Nuvos’ (legacy scheme) or alpha. Scheme regulations made in March 2022, closed the PCSPS(NI) to future accrual from 31 March 2022, and all remaining active PCSPS(NI) members (including partially retired members in active service) moved to ‘alpha’ from 1 April 2022. This completed Phase One to remedy the discrimination identified by the Courts. Any pension benefits built up in the legacy scheme prior to this date are unaffected and PSCPS(NI) benefits remain payable in accordance with the relevant scheme rules. Phase Two will see the implementation of the Deferred Choice Underpin. That is, giving eligible members a choice between legacy scheme and alpha scheme benefits for service between 1 April 2015 and 31 March 2022. At this stage, allowance has not yet been made within CETVs for this remedy. Further information on the remedy will be included in the NICS pension scheme accounts which, once published, are available at https://www.finance-ni.gov.uk/publications/dof-resource-accounts.

Alpha is a ‘Career Average Revalued Earnings’ (CARE) arrangement in which members accrue pension benefits at a percentage rate of annual pensionable earnings throughout the period of scheme membership. The current accrual rate is 2.32 per cent.

From 1 April 2015, all new entrants joining can choose between membership of alpha or joining a ‘money purchase’ stakeholder arrangement with a significant employer contribution (Partnership Pension Account).

Information on the PCSPS(NI) – Closed scheme

New entrants joining on or after 30 July 2007 were eligible for membership of the legacy PCSPS (NI) Nuvos arrangement or they could have opted for a Partnership Pension Account. Nuvos is also a CARE arrangement in which members accrue pension benefits at a percentage rate of annual pensionable earnings throughout the period of scheme membership. The current accrual rate is 2.3 per cent.

Staff in post prior to 30 July 2007 may be in one of three statutory based ‘final salary’ defined benefit arrangements (Classic, Premium and Classic Plus). Since April 2011, pensions payable under classic, premium, and classic plus have been reviewed annually in line with changes in the cost of living. New entrants joining on or after 1 October 2002 and before 30 July 2007 could choose between membership of Premium or joining the Partnership Pension Account.

Benefits in Classic accrue at the rate of 1/80th of pensionable salary for each year of service. In addition, a lump sum equivalent to three years’ pension is payable on retirement. For Premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service.

Unlike Classic, there is no automatic lump sum (but members may give up (commute) some of their pension to provide a lump sum). Classic Plus is essentially a variation of Premium, but with benefits in respect of service before 1 October 2002 calculated broadly as per Classic.

Partnership Pension Account

The Partnership Pension Account is a stakeholder pension arrangement. The employer makes a basic contribution of between 8 per cent and 14.75 per cent (depending on the age of the member) into a stakeholder pension product chosen by the employee. The employee does not have to contribute but, where they do make contributions, the employer will match these up to a limit of 3 per cent of pensionable salary (in addition to the employer’s basic contribution).

Employers also contribute a further 0.5 per cent of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

Active members of the pension scheme will receive an Annual Benefit Statement. The accrued pension quoted is the pension the member is entitled to receive when they reach their scheme pension age, or immediately on ceasing to be an active member of the scheme if they are at or over pension age. The normal scheme pension age in alpha is linked to the member’s State Pension Age but cannot be before age 65. The Scheme Pension age is 60 for any pension accrued in the legacy Classic, Premium, and Classic Plus arrangements and 65 for any benefits accrued in Nuvos. Further details about the NICS pension schemes can be found on the Department on Finance website.

All pension benefits are reviewed annually in line with changes in the cost of living. Any applicable increases are applied from April and are determined by the Consumer Prices Index (CPI) figure for the preceding September. The CPI in September 2022 was 10.1 per cent and HM Treasury has announced that public service pensions will be increased accordingly from April 2023.

Employee contribution rates for all members for the period covering 1 April 2023– 31 March 2024 are as follows:

Scheme Year 1 April 2023 to 31 March 2024

Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures, and from 2003-04 the other pension details, include the value of any pension benefit in another scheme or arrangement which the individual has transferred to the NICS pension arrangements. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2015 and do not take account of any actual or potential benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Real increase in CETV

This reflects the increase in CETV effectively funded by the employer. It does not include the increase in accrued pension due to inflation or contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period. However, the real increase calculation uses common actuarial factors at the start and end of the period so that it disregards the effect of any changes in factors and focuses only on the increase that is funded by the employer.

Compensation for loss of office (Audited)

No members of senior management lost office in 2022-23.

Staff Report

Staff Costs (Audited)

The salary and other costs of the C&AG are not included within the above cost as her remuneration is met directly from the Consolidated Fund for Northern Ireland.

The Northern Ireland Civil Service main pension schemes are unfunded multi-employer defined benefit schemes, but the NIAO is unable to identify its share of the underlying assets and liabilities.

The Public Service Pensions Act (NI) 2014 provides the legal framework for regular actuarial valuations of the public service pension schemes to measure the costs of the benefits being provided. These valuations inform the future contribution rates to be paid into the schemes by employers every four years following the scheme valuation. The Act also provides for the establishment of an employer cost cap mechanism to ensure that the costs of the pension schemes remain sustainable in future.

The Government Actuary’s Department (GAD) is responsible for carrying out scheme valuations. The Actuary reviews employer contributions every four years following the scheme valuation. The 2016 Scheme Valuation was completed by GAD in March 2019. The outcome of this valuation was used to set the level of contributions for employers from 1 April 2019 to 31 March 2023.

The 2016 Scheme Valuation requires adjustment as a result of the ‘McCloud remedy’. The Department of Finance also commissioned a consultation in relation to the Cost Cap element of Scheme Valuations which closed on 25 June 2021. The Cost Cap Mechanism (CCM) is a measure of scheme costs and determines whether member costs or scheme benefits require adjustment to maintain costs within a set corridor. By taking into account the increased value of public service pensions, as a result of the ‘McCloud remedy’, scheme cost control valuation outcomes will show greater costs than otherwise would have been expected. Following completion of the consultation process the 2016 Valuation has been completed and the final cost cap determined. Further information can be found on the Department of Finance website https://www.finance-ni.gov.uk/articles/northern-ireland-civil-service-pension-scheme-valuations.

A case for approval of a Legislative Consent Motion (LCM) was laid in the Assembly to extend the Public Service Pensions and Judicial Offices Bill (PSP&JO) to Northern Ireland. Under the LCM agreed by the NI Assembly on 1 November 2021, provisions are included in the Act for devolved schemes in NI. A second LCM was laid in the Assembly to implement the CCM changes in the Westminster Bill for devolved schemes. The second LCM, as agreed by the Assembly on 31 January 2022, ensured the reformed only scheme design and the economic check will now be applied to the 2020 scheme valuations for the devolved public sector pension schemes, including the NICS pension scheme. The PSP&JO Act received Royal Assent on 10 March 2022. The UK Act legislates how the government will remove the discrimination identified in the McCloud judgment. The Act also includes provisions that employees will not experience any detriment if the adjusted valuation costs breach the set cost cap ceiling, but any breaches of the cost cap floor (positive employee impacts) in the completed valuations will be honoured.

For 2022-23, employers’ contributions of £1,658,685 were payable to the NICS pension arrangements (2021-22: £1,586,960) at one of three rates in the range 28.7 per cent to 34.2 per cent of pensionable pay, based on salary bands.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £NIL (2021 22: £NIL) were paid to one or more of the panel of two appointed stakeholder pension providers. Employer contributions are age-related and range from 8 per cent to 14.75 per cent (2021-22: 8 per cent to 14.75 per cent) of pensionable pay.

The partnership pension account offers the member the opportunity of having a ‘free’ pension. The employer will pay the age-related contribution and if the member does contribute, the employer will pay an additional amount to match member contributions up to 3 per cent of pensionable earnings.

Employer contributions of £NIL, 0.5 per cent (2021-22: £NIL, 0.5 per cent) of pensionable pay, were payable to the NICS Pension schemes to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees. Contributions due to the partnership pension providers at the reporting period date were £NIL. Contributions prepaid at that date were £NIL.

One person (2021-22: 0 persons) retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £NIL (2021-2022: £NIL).

Average number of persons employed (Audited)

The average number of full-time equivalent persons employed during the year was as follows.

Reporting of Civil service and other compensation schemes – exit packages (Audited)

There were no compulsory redundancies in 2022-23 (2021-22: nil).

There were 113 permanent full-time equivalent staff at 31 March 2023 (2021-22:115).

Consultancy

In 2022-23, we paid £25,000 (2021-22: £8,000) to external consultants. This amount is included in Professional Services Bought In which is disclosed in Note 4 to the Financial Statements.

Temporary staff

In 2022-23, we paid £17,400 (2021-22: £NIL) for temporary staff. This amount is included in Note 3 to the Financial Statements.

‘Off-Payroll’ Engagements

Off-payroll engagements are those where individuals, either self-employed or acting through a personal service company, are paid gross by the employer. In line with HM Treasury requirements, DoF requires disclosure of such engagements that were in place during 2022-23. We had no off-payroll engagements in place at any time during 2022-23.Assembly Accountability and Audit Report

Statement of Outturn against Assembly Supply (Audited)

In addition to the primary statements prepared under International Financial Reporting Standards (IFRS), the Government Financial Reporting Manual (FReM) requires the NIAO to prepare a Statement of Outturn against Assembly Supply (SOAS) and supporting notes.

The SOAS and related notes are subject to audit, as detailed in the Certificate and Report of Baker Tilly Mooney Moore to the Northern Ireland Assembly.

The SOAS is a key accountability statement that shows, in detail, how an entity has spent against its Supply Estimate. Supply is the monetary provision (for resource and capital purposes) and cash (drawn primarily from the Consolidated Fund) that the Assembly gives statutory authority for entities to utilise. The Estimate details Supply and is voted on by the Assembly at the start of the financial year and is then normally revised by a Supplementary Estimate at the end of the financial year. It is the final Estimate, normally the Spring Supplementary Estimate, which forms the basis of the SOAS.

Should an entity exceed the limits set by its Supply Estimate, called control limits, its accounts will receive a qualified opinion.

The format of the SOAS mirrors the Supply Estimates and corresponding Act of the Assembly, to enable comparability between what the Assembly approves and the final outturn. The Supply Estimates are voted by the Assembly and published on the DoF website.

The SOAS contains a summary table, detailing performance against the control limits that the Assembly has voted on, cash spent (budgets are compiled on an accruals basis and so outturn won’t exactly tie to cash spent) and administration.

The supporting notes detail the following: Outturn detailed by Estimate line, providing a more detailed breakdown (note 1); a reconciliation of outturn to net expenditure in the Statement of Comprehensive Net Expenditure (SOCNE) to tie the SOAS to the financial statements (note 2); and a reconciliation of net resource outturn to net cash requirement (note 3).

The SOAS and Estimates are compiled against the budgeting framework, which is similar to, but different from, IFRS. An understanding of the budgeting framework and an explanation of key terms is provided on page 48, in the financial review section of the Performance Report. Further information on the Public Spending Framework and the reasons why budgeting rules are different to IFRS can also be found in chapter 1 of the Consolidated Budgeting Guidance, available on www.gov.uk.

The SOAS provides a detailed view of financial performance, in a form that is voted on and recognised by the Assembly. The financial review, in the Performance Report, provides a summarised discussion of outturn against estimate, and functions as an introduction to the SOAS disclosures.

Summary tables – mirroring Parts I and II of the Estimates

Notes to the Statement of Outturn against Assembly Supply, 2022-23 (£000s)

SOAS 2. Reconciliation of outturn to net operating expenditure

No reconciliation is required as resource outturn in the SOAS is the same as net operating expenditure in the SOCNE.

Summary tables – mirroring Part III of the Estimates

Other Assembly Accountability Disclosures (Audited)

Losses and Special Payments

No exceptional kinds of expenditure, such as losses and special payments that require separate disclosure because of their nature or amount, were incurred.

Fees and Charges

The Office has a target of recovering the full cost of undertaking fee paying work.

The information here is provided solely to meet the requirements of the Department of Finance’s “Fees and Charges” guide and is not disclosed for the purpose of IFRS 8.

Variations in fee income and costs, when comparing one year with another, are due to differences in the timing of audits being completed, significant issues arising in certain audits and both the NIAO and clients adapting to new ways of working post pandemic.

Remote Contingent Liabilities

In addition to contingent liabilities reported within the meaning of International Accounting Standard (IAS) 37, the Office is required to report liabilities for which the likelihood of economic benefit in settlement is too remote to meet the definition of a contingent liability. The Office has no such liabilities.

Dorinnia Carville 
Comptroller and Auditor General for Northern Ireland
30 June 2023

Independent Auditor’s Report to the Northern Ireland Assembly

We certify that we have audited the financial statements of the Northern Ireland Audit Office for the year ended 31 March 2023 under the Audit (Northern Ireland) Order 1987. These financial statements comprise: the Statement of Comprehensive Net Expenditure, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Taxpayers’ Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting standards (IFRSs) as adopted by the European Union, and as interpreted and adopted by the 2022-23 Government Financial Reporting Manual (the 2022-23 FReM). We have also audited the Statement of Outturn against Assembly Supply, and the related notes, and the information in the Accountability Report that is described in that report as having been audited.

Opinion on Financial Statements

In our opinion:

• the financial statements give a true and fair view of the state of the Northern Ireland Audit Office’s affairs as at 31 March 2023 and of its net operating expenditure, cash flows and changes in taxpayers’ equity for the year then ended;
• the financial statements have been properly prepared in accordance with the Audit (Northern Ireland) Order 1987 and the relevant Department of Finance guidance; and
• have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adopted by the 2022-23 FReM.

Opinion on Regularity

In our opinion, in all material respects:

• the Statement of Outturn against Assembly Supply properly presents the outturn against voted Assembly control totals for the year ended 31 March 2023 and shows that those totals have not been exceeded; and
• the expenditure and income recorded in the financial statements have been applied to the purposes intended by the Assembly, and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis of opinions

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the accounts section of our report. We are independent of the Northern Ireland Audit Office in accordance with the ethical requirements that are relevant to our audit of the accounts in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinions.

Basis for the regularity opinion on the financial statements

We are required to obtain evidence sufficient to give reasonable assurance that the expenditure to which the statement relates has been incurred lawfully and in accordance with the authority that governs it and that the money to which the statement relates, received by the Northern Ireland Audit Office for a particular purpose or particular purposes, has not been expended otherwise than for that purpose or purposes. We have conducted our work in accordance with the Statement of Recommended Practice, Practice Note 10 Audit of financial statements of public sector bodies in the United Kingdom in this respect.

Conclusions relating to going concern

We have nothing to report in respect of the following matters to which the ISAs (UK) require us to report to you where:

• the Accounting Officer’s use of the going concern basis of accounting in the preparation of the accounts is not appropriate; or
• the Accounting Officer has not disclosed in the accounts any identified material uncertainties that may cast significant doubt about the Northern Ireland Audit Office’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the accounts are authorised for issue.

Other information

The Accounting Officer is responsible for the other information included in the annual report. The other information comprises the information included in the annual report other than the financial statements, the parts of the Accountability Report described in the report as having been audited, and our audit certificate and report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinion on other matters

In our opinion:

• the parts of the Accountability Report to be audited have been properly prepared in accordance with the guidance issued by the Department of Finance; and
• the information given in the Performance Report and Accountability Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Responsibilities of the Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer Responsibilities, the Accounting Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and for such internal control as the Accounting Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the accounts the Accounting Officer is responsible for assessing the Northern Ireland Audit Office’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Northern Ireland Audit Office plans to cease operations or has no realistic alternative but to do so.

The Accounting Officer is responsible for the propriety and regularity of the public finances, for keeping proper books and for safeguarding assets, as set out in the Statement of Accounting Officer’s Responsibilities.

Matters on which we report by exception

We have nothing to report in respect of the following matters which we report to you if, in our opinion:

• adequate accounting records have not been kept; or
• the financial statements and the parts of the Accountability Report to be audited are not in agreement with the accounting records; or
• we have not received all of the information and explanations we require for our audit; or
• the Governance Statement does not reflect compliance with Department of Finance’s guidance; or
• certain disclosures of Board and staff remuneration specified by the Government Financial Reporting Manual are not made.

Auditor’s responsibilities for the audit of the financial statements

Our responsibility is to audit, certify and report on the financial statements in accordance with the Audit (Northern Ireland) Order 1987.

We are required to obtain evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• we gained an understanding of the legal and regulatory framework applicable to the Northern Ireland Audit Office through discussions with management, and from our wider knowledge and experience;
• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Northern Ireland Audit Office, including the Audit (Northern Ireland) Order 1987. We also considered the risks of non-compliance with the other key legislation and we considered the extent to which non-compliance might have a material effect on the financial statements;
• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the Northern Ireland Audit Office’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 1 were indicative of potential bias; and
• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;
• attending all Audit & Risk Assurance Committee meetings during the year and reviewing the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and claims;
• enquiring of management as to whether there has been any legal correspondence.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the accounting officer and other management and the inspection of regulatory and legal correspondence, if any.

The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website. This description forms part of our certificate.

In addition, we are required to obtain evidence sufficient to give reasonable assurance that the Statement of Outturn against Assembly Supply properly presents the outturn against voted Assembly control totals and that those totals have not been exceeded. We are also required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Assembly and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Use of our report

This report is made solely to the Northern Ireland Assembly, as a body, in accordance with the Audit (Northern Ireland) Order 1987. Our audit work has been undertaken so that we might state to the Northern Ireland Assembly those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Northern Ireland Audit Assembly as a body, for our audit work, for this report or for the opinions we have formed.

Baker Tilly Mooney Moore 
30 June 2023 
Chartered Certified Accountants and Registered Auditor 
Clarendon Dock 
Belfast BT1 3BG