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Audit and Risk Assurance. AUDITING HARD TO REACH AREAS Equal Pay – A Case Study Sue Lewry-Jones Internal Audit and Inspection Manager. Auditing Hard to Reach Areas. Auditing Hard to Reach Areas. Climbing The World’s Highest Peak

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audit and risk assurance
Audit and Risk Assurance

AUDITING HARD TO REACH AREAS

Equal Pay – A Case Study

Sue Lewry-Jones

Internal Audit and Inspection Manager

auditing hard to reach areas3
Auditing Hard to Reach Areas

Climbing The World’s Highest Peak

  • 1808 - British began a survey of the world’s highest mountains
  • 1852 - Mount Everest was identified as the world’s highest peak
  • 1920s Expeditions – George Mallory
  • 1953 – First Successful Ascent to the summit
  • Numerous records
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Auditing Hard to Reach Areas

What does the Everest story tell us?

  • It helps if we have a map
  • It helps if others have done it before
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Auditing Hard to Reach Areas

The Audit Map

  • Objectives
  • Risks
  • Controls

Concern – Not our typical area of expertise

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Auditing Hard to Reach Areas

How to get started:

Research!!

External Sources

  • Internet
    • Especially Google
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Auditing Hard to Reach Areas – Equal Pay

External Sources

  • Internet
    • Improvement and Development Agency
    • Unison
    • Personnel press
    • Equal Pay Policies
  • IIA
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Auditing Hard to Reach Areas – Equal Pay

What did my External research show me?

The Equal Pay Act 1970 gives men and women the right to equal pay for equal work unless there is a genuine and material reason for the inequality that is not related to sex

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Equal Pay – Relevant Case Law

Much case law hinges around Comparators

1988 – Pickstone v Freemans plc

1993 – Enderby v Frenchay

2005 - Degnan v Redcar & Cleveland BC

Successful claims may result in back-pay of up to 6 years

Auditing Hard to Reach Areas
auditing hard to reach areas equal pay11
Auditing Hard to Reach Areas – Equal Pay

The Equal Pay Act includes:

  • Part-timers
  • Fixed term workers
  • Temporary workers
  • Casual or bank workers

It covers all aspects of Pay including:

  • Overtime rates and allowances
  • Performance related pay and benefits
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Auditing Hard to Reach Areas

More research!

Internal Sources

  • Intranet
    • Reward strategy
    • Pay policy
    • Grading structure
  • Risk registers
  • Financial Statements
    • Financial Provision
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Auditing Hard to Reach Areas

Identify who you need to speak to :

  • HR
  • Legal
  • 3rd Parties
  • Unions??
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Auditing Hard to Reach Areas – Equal Pay

Key Findings

There are a number of key controls in place which demonstrate a commitment to Equal Pay:

  • A clear grade structure with published salary ranges
  • A formal job evaluation methodology to ensure jobs are graded according to skills required
  • Targetted pay harmonisation exercises
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Auditing Hard to Reach Areas – Equal Pay

However…

  • No specific written policy on Equal Pay
  • No central database of job profiles linked to positions to allow comparisons across the organisation
  • Unclear how School support staff are included in the overall strategy for implementing equal pay
  • The same job title being used across a wide range of grades
  • A range of allowances continue to be paid despite “clean pay” being the aim
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Auditing Hard to Reach Areas – Equal Pay

Key recommendations:

  • A stated policy on Equal Pay which is clearly communicated
  • A central database of job profiles linked to positions
  • Regular monitoring of grade and salary levels by gender
  • Rationalisation of job titles
  • Harmonisation of allowances
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Auditing Hard to Reach Areas – Equal Pay

In conclusion when auditing “Hard to reach areas”:

Key auditing principles still apply ie:

  • Objectives Risks Controls
  • Do your research – especially look at what others are doing
  • Identify all key parties
  • Interrogate your systems to independently verify what you are being told
  • Be aware of issues of confidentiality or sensitivity of the area you are looking at