Audit Committee

Terms of Reference and Membership 2020-21

Role

On behalf of Council, the Audit Committee provides oversight of, and advises Council in respect of, the University’s entire assurance and control environment, including risk management, control and governance arrangements, and the arrangements to provide economy, efficiency and effectiveness. It also advises Council on the University’s internal and external audit arrangements, and audit aspects of the financial statements.

The Committee is authorised by Council to investigate any activity within its Terms of Reference. It is authorised to seek any information it requires from any employee, and all employees are directed to cooperate with requests made by the Committee.

The Committee is authorised by Council to obtain outside legal or other independent professional advice and to secure the attendance of non-members with relevant experience and expertise if it considers this necessary, normally in consultation with the President and Vice-Chancellor and Chair of Council. However, it may not incur direct expenditure without the prior approval of Council.

Responsibilities

To advise Council on the appointment and retention of the external auditors; the audit fee and the value for money obtained; the provision of any non-audit services by the external auditors; and any questions of resignation or dismissal of the external auditors.
2. To discuss with the external auditors, before the audit begins, the nature and scope of the audit.
3. To discuss with the external auditors problems and reservations arising from the interim and final audits, including a review of the management letter, incorporating management responses, and any other matters the external auditors may wish to discuss (in the absence of management where necessary).
4. To consider and advise Council on the appointment and terms of engagement of the internal audit service, the audit fee, the provision of any non-audit services by the internal auditors and any questions of resignation or dismissal of the internal auditors.
5. To review the internal auditors' audit needs and risk assessment, audit strategy and the audit plan; to consider major findings of internal audit investigations and management responses; and promote co-ordination between the internal and external auditors. The Committee will ensure that the resources made available for internal audit are sufficient to meet the institution's needs (or make a recommendation to Council as appropriate).
6. To keep under review the effectiveness of risk management, control and governance arrangements and systems including the risk register and in particular to review the external auditors' management letter, the internal auditors' annual report, and management responses.
7. To monitor the implementation of agreed audit-based recommendations from whatever source.
8. To ensure that all significant losses have been properly and thoroughly investigated and that the internal and external auditors, and where appropriate the Office for Students, have been informed.
9. To oversee the University's policies on fraud, financial irregularity and whistleblowing, including being notified of any action taken under these policies.
10. To satisfy itself that satisfactory arrangements are in place to ensure the sustainability of the institution and to promote economy, efficiency, and effectiveness. This may include considering arrangements that:
a) support the institution’s culture and behaviour;
b) ensure the effective managements of conflicts of interest; and
c) enable the appointment of ‘fit and proper persons’ to Council and senior executive positions.
11. To satisfy itself that effective arrangements are in place to monitor and review the robustness of the University's systems and controls for the management, accuracyand quality assurance of external data returns to stakeholders and regulatory bodies.
12. To receive, and consider the implications of, any relevant reports from the National Audit Office, the Office for Students and other organisations.
13. To monitor annually the performance and effectiveness of external and internal auditors, including any matters affecting their objectivity, and to make recommendations to Council concerning their re-appointment, where appropriate.
14. To monitor other relevant sources of assurance, such as other external reviews.
15. To consider elements of the annual financial statements in the presence of the external auditors, including the auditors’ formal opinion, the statement of members' responsibilities, internal control and risk management statements and any corporate governance statement, in accordance with regulatory accounts directions.
16. To submit to Council an annual report summarising the work of the Committee for the financial year and any significant issues up to the date of preparation of the report. The report will be addressed to Council and the President and Vice-Chancellor and will summarise activity for the year. The report will give the Committee's opinion of the adequacy and effectiveness of the institution’s arrangements for the following:
• internal control and risk management systems and statements;
• economy, efficiency and effectiveness (value for money);
• sustainability; and
• systems and controls for the management, accuracy and quality assurance of external data returns.
These opinions will be based upon the information presented to the Committee. The report will also include detail of any fraud, financial irregularity and whistleblowing incidents reported to the Committee and the outcome/actions arising from investigations. The annual report will normally be submitted to Council before the members' responsibility statement in the annual financial statements is signed. The report will usually be published after consideration by Council.
17. To consider, record and address the potential equal opportunity impacts of decisions made by the Committee (in accordance with the ‘due regard’ provisions of the Equality Act 2010).
18. To undertake a periodic review of its Terms of Reference (normally annually) and of its own effectiveness (at least every four years), and to recommend any necessary changes to Council.

Reports to

Council

Constitution and membership 2020-21

The Committee and its Chair shall be appointed on behalf of Council by the Nominations Committee, and shall consist of no fewer than three lay members of Council and, if considered necessary or desirable, additional co-opted members with particular expertise. At least one member should have recent and relevant experience in finance, accounting or auditing.

No member of the Committee may also be a member of the Finance Committee. The Chair of Council must not be an Audit Committee member, and Committee members must not have executive responsibility for the management of the University.

Duration of appointment

For lay members of Council, Audit Committee membership is three years and renewable. The maximum length of service will normally be six years.

For the co-opted members of the Audit Committee, membership is normally for one year and renewable. The maximum length of service will normally be three years.

Normally in attendance at meetings

Internal Auditors (PwC)
External Auditors (Ernst & Young)
Deputy Vice-Chancellor
Registrar and Secretary
Chief Operating Officer
Director of Finance

The Vice Chancellor will normally attend some Committee meetings in the year by invitation of the Chair.
The Committee will normally hold a private session with Internal and External Auditors following each meeting. The Committee also reserves the right, whenever it deems it appropriate, to go into confidential session and exclude any or all other participants and observers.

Secretariat

Governance Office

Frequency of meetings

The Committee will normally meet at least five times in each academic year. Any Committee member or auditor may ask the Chair to convene an additional meeting.

Quorum

Two members, one of whom must be a lay member of Council.

Appendix – membership

Constitution and membership 2020-21

Four lay members of Council, appointed by the Nominations Committee

a. Mr Richard Tapp (Chair)
b. Mr Martin Hindle
c. Mr Martin Cullen
Two co-opted lay members
d. Mr Adrian Keene, from 01.08.2019 to 31.07.2021
e. Mr Peter Dundas from 04.09.2019 to 31.07.2021

Normally in attendance at meetings

Internal Auditors (PwC)
External Auditors (Ernst & Young)
Deputy Vice-Chancellor Edmund Burke
Registrar and Secretary Geoff Green
Chief Operating Officer Martyn Riddleston
Director of Finance Paul Gowdridge

In attendance by invitation

Vice-Chancellor Nishan Canagarajah

Secretariat

Governance Office Alison Benson (Committee Secretary)