Compliance with the Governance and Financial Viability Standard Arhag confirms its compliance with the Governance and Financial Viability Standard of the Regulator of Social Housing. The Board has assessed its compliance with the standard at least once during the year with reference to the current position of the association. RiskManagement A risk management framework sits at the heart of the system of internal control. The Board confirms that the process for identifying, evaluating and managing the significant risks faced by the organisation is ongoing and continues to be developed by the Senior Management Team. ARC has received risk management reports from the Senior Management Team and reviews the Strategic Risk Register on behalf of the Board. During the year the ARC and the Board reviewed the long-term financial plan and will consider scenarios for stress testing of this plan over the course of the next year. Internal Audit The prime responsibility of the internal audit service is to provide the Board with assurance on the adequacy and effectiveness of the internal control system, including risk management and governance. Internal audit also plays a valuable role in helping management to improve systems of internal control and so to reduce the potential effects of any significant risks faced. Internal Audit is delivered by an outsourced audit service. ARC reviews the findings arising from all Internal Audit Reports and is provided with progress reports on the implementation of agreed recommendations for improvement to the point of conclusion. An annual report and overall assurance opinion on the system of internal control based on the Internal Audit work performed during the year and management response to that work is provided to ARC and all matters arising are being monitored by ARC for appropriate management action. Fraud Management There is an established code for integrity and anti-bribery and Arhag operates a zero-tolerance approach to any instances of fraud or corruption. There is an Anti-Fraud Policy in place covering prevention, detection and reporting of fraud and the recovery of assets. A register of identified incidents is maintained. There were no issues reported during the year. ARC reviews the fraud and loss register and reflects the information contained within it in its assessment of the control environment. Information and Financial Reporting Systems Financial reporting procedures include a long-term financial plan, detailed annual budgets, annual value for money reporting as part of the financial statements and regular management accounts which are reviewed by ARC and by the Board. Any issues raised in the external audit management letter issued at the conclusion of the annual audit are dealt with to the satisfaction of both the external auditors and ARC with progress tracked to the point of conclusion. Key performance indicators and business objectives set as part of the performance management framework are regularly reviewed by the Board to assess progress and outcomes. Control Environment and Procedures Governance arrangements are subject to continuing review and development to ensure they remain fit for purpose. Board and Committee membership is reviewed regularly in line with the policy terms. Compliance with the chosen code of governance and the Regulatory Framework is reviewed annually. The Board retains responsibility for a defined range of issues covering strategic, operational, financial, and compliance matters and new investment projects. The Board disseminates its requirements to employees through a framework of policies and procedures. The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks faced by Arhag and for preventing, detecting, investigating and insuring against fraud. This process has been in place during the year under review, up to the date of the annual report, and is regularly reviewed. The Board has not identified any weaknesses sufficient to cause material misstatement or loss, which require disclosure in the financial statements. Health and Safety The Board is aware of its responsibilities for Health and Safety, with approved policies and monitoring in place. The association continues to focus on all areas of health and safety and operates a strong risk management approach. Insurance Insurance policies indemnify Board members and officers against liabilities when acting on behalf of the association. Modern Slavery We are committed to ensuring there is transparency in our approach to tackling modern slavery throughout our supply chains, consistent with our disclosure obligations under the Modern Slavery and Human Trafficking Act 2015. We expect the same high standards from all our contractors, suppliers and other business partners, and as part of our contracting and procurement processes, we include specific prohibitions against the use of forced, compulsory or trafficked labour, or anyone held in slavery or servitude, whether adults or children, and we expect that our suppliers will hold their own suppliers to the same high standards. “Arhag operates a zerotolerance approach to any instances of fraud or corruption.” “We are committed to ensuring there is transparency in our approach to tackling modern slavery.” Annual Report 2021-2022 39
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