The Committee comprises four members, to include three members of the Board of Governors and one independent member drawn from outside the Board.
The Committee has authority to co-opt additional members with particular expertise for short periods. The members must have no involvement in or responsibility for the executive management of the institution.
The Chair of the Committee is appointed by the Board of Governors and must be a member of the Board. The Chair has direct access at all times to the Chair of the Board of Governors and to the Vice-Chancellor.
In order to retain the Committee's independence, the Chair and Deputy Chair of the Board of Governors will not serve on the Committee.
At any time at least one member must have a background in finance, accounting or auditing.
No member of the Audit Committee will be a member of the Finance and Capital Projects Committee.
Terms of Reference
The Board of Governors has established an Audit Committee.
In accordance with the HEFCE Audit Code of Practice, the Audit Committee is independent of the management of the University, and has been granted the standing and the resources to report directly to the Board of Governors on:
- The effectiveness of the internal control system in the finance and operational areas.
- The management of risk, including the reliability and integrity of financial information, the effectiveness and efficiency of operations, legal compliance, and the safeguarding of assets.
- Audit issues arising from financial and other relevant statements and reports, particularly the annual financial statements.
- Best value in the use of public funds, including good procurement practice.
- The promotion of high standards of corporate governance.
- The Committee is required to alert the Board of Governors to serious deficiencies in any of these areas, which impact on the effective management of the institution and the proper use of public funds.
A quorum will comprise at least two members.
The Vice-Chancellor and the Director of Finance, together with representatives of the internal and external audit services, will attend all meetings. Other senior staff may be asked to attend meetings for particular items.
The Committee may meet in closed session with the auditors. The Chair will report any serious issues arising from such meetings to the Vice-Chancellor immediately after each such meeting.
The Clerk to the Governors will serve as Secretary to the Committee.
Frequency of Meetings
The Committee will meet at least three times a year. The external and internal auditors may ask the Chair to convene a meeting at other times whenever they consider it to be necessary.
The Committee is empowered by the Board of Governors to conduct an investigation into any activity or reported breakdown in controls, which falls within its terms of reference. It is authorised to seek any information it requires from any member of staff. All members of staff are required to co-operate with any request made by the Committee. Failure to do so will be reported to the Vice-Chancellor and if necessary to the Board of Governors.
The Committee may request the Clerk to procure specialist advice to assist it in its work.
The Audit Committee will review the draft annual financial statements before they are presented to the Board of Governors. The Committee's role will be restricted to the audit issues raised by the statements, including the external audit opinion, the audit summary, the external auditors' management letter, the statement of members' responsibilities, and the statement of corporate governance. The Committee will confirm with the external and internal auditors that the effectiveness of the internal control system has been reviewed, and advise the Board of Governors accordingly. This responsibility, in accordance with the HEFCE Accounts Direction 2000, will be extended to include a risk management disclosure statement by no later than 2002/2003.
Subject to any direction that may be given by the Board of Governors, and subject to the requirements of the Instrument and Articles, the Audit Committee shall have the following responsibilities:
- To advise the Board of Governors on the appointment and annual performance of the external auditors, the audit fee, the provision of any non-audit services by the external auditors and any circumstances leading to resignation or dismissal of the external auditors.
- To oversee the nature and scope of the external audit service and of each annual audit cycle.
- To review with the external auditors any problems and reservations arising from the auditing of the University's accounts, including any such problems or reservations reported in the management letter and management's response, together with all other matters which the external auditors may wish to draw to the Committee's attention (with or without the Vice-Chancellor and other officers being present).
- To advise the Board of Governors on the appointment and annual performance of the internal auditors, the audit fee, the provision of any non-audit services by the internal auditors and any circumstances leading to the resignation or dismissal of the internal auditors.
- To consider the strategic plan and annual audit plan, and to ensure that the resources made available under the annual budget are sufficient to meet the institution's needs and are risk focussed; to consider major findings of internal audit investigations and management's response; and to promote co-ordination between the internal and the external audit services.
- To monitor the effectiveness of internal control and risk management systems in the finance and non-finance areas.
- To review the external auditors' management letter and the internal auditors' annual report, and to monitor the implementation of agreed management actions.
- To keep under review the management follow-up to other audit-based recommendations from whatever source.
- To ensure that all significant losses have been properly investigated and that the internal and external auditors, and where appropriate the HEFCE Accounting Officer, have been informed.
- To receive and approve the University's policies on fraud, irregularity and public interest disclosure, including being notified of any action taken under these policies.
- To satisfy itself that satisfactory arrangements are in place to promote best value, and to monitor such other dimensions of performance as shall be deemed to be reliable and appropriate measures of institutional effectiveness.
- To receive any relevant reports from the National Audit Office, the HEFCE and other organisations.
- To submit an annual report to the Board of Governors and the Vice-Chancellor, summarising activity for the year. The report will include as a minimum the Committee's opinion on the extent to which the Board of Governors may rely on the internal control system and the arrangements for securing best value. If the time scale permits, the annual report will be submitted to the Board of Governors before the members' responsibility statement in the annual financial statements is signed. The Committee's report will be submitted to the HEFCE by 28 February in each year.
The minutes will be circulated to all members of the Board of Governors.
Chair’s action between meetings
The following categories of business may be conducted by the Chair of the Board of Governors, Academic Board or any of their subcommittees and panels, by chairs of boards of directors of subsidiary companies and by the Chair of the Board of Trustees of UELSU.
The first three delegations are minuted in advance and then reported back at the next meeting of the board or committee.
The fourth to sixth delegation are requested in writing by officers between meetings, supported by background information and then reported back at the next meeting of the board or committee
The relevant board or committee will monitor the use made of Chair’s action.
- Business which is unfinished at a board or committee meeting for lack of information but on which a clear steer is given to guide the decision when the information becomes available
- Business which is approved at a board or committee subject to certain conditions to be met by the management or other parties and signed off by the chair
- Business involving signature/s to the detailed formal paperwork associated with a prior decision of a board or committee such as the sale of a building
- The signing of routine contracts that commit UEL, or a company or UELSU, above a certain level of expenditure
- Routine decisions on senior post holders (Chair of the Board/Remuneration Committee only)
- Urgent business between meetings, canvassing the support of other board and committee members as far as possible by phone or email. Such decisions should not involve changes of policy of the board or committee and should only be taken where there is material risk to UEL, or a company or UELSU.
Reviewed by the Audit Committee on 15 September 2014
Approved by the Board of Governors on 28 September 2014