AUDIT &RISK COMMITTEE
Termsof Reference
(Includes changesagreed atAnnual Council
19 May 2022)
1.
Constitution &Purpose
The Audit & Risk Committee is a key component of the
Council’scorporate governance framework. The Committee
reports to the Council and its purpose is to provide those charged
with governanceindependent assurance on the adequacy of the risk
managementframework, the internal control environment and the
integrity of thefinancial reporting andgovernance processes.
It fulfils the role of ‘the Board’ for the purposes of
the Public SectorInternal Audit Standards.
The Terms of Reference of the Committee will comply with Part 4a of
theConstitution unlessexplicitly detailed below.
1.
Membership
The Committeeshall comprise nine Members, madeup of eight Non- ExecutiveElected
Councillors and one Independent Person.A quorumof atleast
threeCouncillors will be
requiredat all meetings. The Independent Member shall be a
non-voting co-optee of the
Committee.
The Committee must remain apolitical, displaying unbiased
attitudes,treating auditors,officers, theexecutive andmanagement equally.
2.
Attendanceby officers
The Director of Finance (S151) or their nominated officer(s) and
thedesignated Headof InternalAudit Serviceshall normallyattend
meetings.There isa standinginvitation tothe
Council’sappointed ExternalAuditor to attend
allmeetings.
Other officerswho willattend asrequired, includingat therequest
ofthe Chair.
3.
Frequencyof meetingsand
agendas
Meetingsshall
beheld notless thanfour timesa year.
4.
Duties
The dutiesof theCommittee shallbe asset outin theannexed schedule
to these Termsof Reference.
To supportand assistCommittee membersundertaking theirduties and
extending their knowledge, regular briefings or training will be
providedby officers.
5.
Authority
The Committeehas theresponsibilities detailedin Annex1.
TheCommittee is authorised by the Council to investigate any
activity within its termsof reference.
It is authorised to seek any information it requires from any
officer andall officers are directed to co-operate with any request
made by theCommittee.The
Chairwill advisethe ChiefOperating Officeras the Head of PaidServiceifithasexercisedthis authorityto
seekinformation (other than
routine information) from any officer, setting out the
informationrequired andthe circumstances underlyingthe request.
The Committeeis authorisedby theCouncil, ifconsidered necessary, to
secure the attendance of third parties with relevant experience
andexpertise provided that the Chair notify the Chief Operating
Officer asthe Head of Paid Service before any fees for such
attendance areagreed.
6.
Accountability
The Committee will undertake an annual review of its
effectiveness(including whereit hasadded valueand
supportedimprovement).
The outcome of this annual review and the Committee’s
activity will bereported to the Councileach year.
Dutiesof the Audit& Risk Committee
1.
AuditFramework
1.1
InternalAudit
•
To fulfil the role of ‘the Board’ for
the purposes of the Public SectorInternal Audit Standards(the
PSIAS).
•
To reviewand approve: -
§
TheInternalAuditCharter
whichdefines thepurpose ofthe internalaudit function.
§
The risk-based internalaudit plan,including
resourcerequirements.
§
The Head ofInternal AuditService’s
annualreport containingan opinionon theoverall adequacyand
effectiveness of the Council’s control environment,
andconformance to the PSIAS.
•
To receive regular reports on progress against the
internal auditplan, containingactivity undertaken,summaries ofkey
findings,issues ofconcern and action in hand.
•
To review conformance to the principles of the CIPFA
Statement on the Roleof theHead ofInternal Auditin Public
Service Organisations,and
tosupport anyimprovements required.
•
To contribute to and support an external quality
assessment of theinternal auditfunction whichis arequirement
ofPSIAS totake placeat least onceevery five years.
•
To review any proposals made in relation to the
appointment ofexternal providersof internalaudit servicesand tomake
recommendations.
1.2
ExternalAudit
•
To consider, comment upon and note the arrangements
chosen bythe Councilto selectand appoint itsstatutory
externalauditor.
•
To review the External Auditor’s disclosure of
independence andobjectivity. Tosatisfy itself thatno issues
withcompliance withethical standardsor problemswith auditquality
havebeen raised.
•
To considerand notethe annualaudit feesletter andthe
assumptionssupporting the fees.
•
To consider the scope and depth of all external
audit plans, reports andaudit risk
assessments.
•
To considerthe ExternalAuditor’s ISA260
Reportto ‘ThoseCharged with Governance’.This
contains:
§
key findings arisingfrom theaudit ofthe
Council’sfinancial statements;
§
the Auditor’s assessmentof theCouncil’s
arrangementsto securevalue formoney (VFM)in itsuse ofresources;
and
§
the requirement formembers ofthe Committeeto
authorisethe Directorof Financeto signthe letterof representation
to the External Auditor from the Council inconnection withthe
auditof theCouncil’s financialstatements.
•
To note the External Auditor’s annual report
on the claims andreturns certified forthe Council.
•
To ensurethat non-auditwork bythe ExternalAuditor
isin accordance with the Council’s Policy for
Engagement of External Auditors for Non-Audit Work and report
any such instances to theCouncil.
2.
CounterFraud
andInvestigations
·
To review andapprove, ona triennialbasis
(unlesssignificant changesin legislationor circumstancesdictate
otherwise),the Council’s policy andprocedures for:
-
i.
Anti-Fraud(including Briberyand
Corruption)
ii.
Disclosure(whistleblowing)
·
To note the outcomes of any review of the
Council’s conformance tothe CIPFA Code of Practice on
Managing the Risk of Fraud andCorruption.
·
To receive and note reports on the performance of
the counter fraudfunctionandoutcomesfromthe Council’sparticipation
inthe NationalFraud Initiative (NFI).
·
To consider regular reports on the Council’s
application of theRegulation of Investigatory Powers Act (RIPA) and
the outcomes ofany inspectionsand approve theadoption ofany
relatedpolicies.
3.
StatutoryFinancial
Reporting
•
To reviewand approvethe annualstatutory statementof
accounts and theannual
Letterof Representationon behalfof theCouncil.
•
To bring tothe
attentionof theCouncil anyconcerns arisingfrom thefinancial
statementsor from the audit.
•
To receive
periodicreports providingupdates onaccounting andfinancial
developments.
4.
RiskManagement
andInsurance
·
To review andchallenge theadequacy andeffectiveness
ofthe Council’soverall riskmanagement framework,specifically
to:-
i.
Consider andapprove, onan annualbasis,
theCouncil’s CorporateRisk
ManagementPolicy Statement& Strategy.
ii.
Consider and approve, on an annual basis, the
Council’sCorporateBusinessContinuity ManagementPolicy
Statement andStrategy,
ensuringit iscompliant withthe statutory duties required by theCivil
ContingenciesAct 2004and continues to align tointernationalandnational standardsand good
practice
guidelines.
iii.
Review reports in respect of the status of key
current andemerging risks and internal controls relating to those
risks,including the Operational and Strategic Risk Registers
andpartnerships withother organisations.
iv.
Receiveandnotetheannualreporton
theCouncil’s insurancearrangements andits claims
performance.
5.
Governanceand
AssuranceFrameworks
·
To satisfy itself that the Council’s assurance
statement including theAnnual Governance Statement, properly
reflect the risk environment and anyactions requiredto
improveit, anddemonstrate howgovernance
supports the achievement of the Council’s objectives.The
Committee’sresponsibilities are to:-
i.
Review the adequacy of the Council’s assurance
frameworkthrough theannual reviewof itssystem of
internalcontrol.
ii.
Review and approve the Council’s Local Code of
CorporateGovernancepreparedin accordancewith
theCIPFA/SOLACE Good Governance Framework and the statutory
requirementfor producingan AnnualGovernance Statement.
iii.
Note any reports providing updates on assurance,
risk or governancerelated
developments
6.
Complaints
·
To consider anannual reporton complaints,including
theLocal Governmentand SocialCare Ombudsman’sannual
reviewletter and recommendation.
·
To consider anddecide onappropriate actionsrelating
tothe Council’s compliance with its own and other published
or regulatorypolicies, Acts,standards
and controls.
·
To consider ad-hocLGSCO reports.
7.
Procurement
·
To receive and note the annual reportsetting out the
Council’s performance against the Procurement Plan and
compliance with theContract Procedure Rules(including dataon
waivers).
·
To consider any proposals for changes to the Rules
to be made toFullCounciland toreview anychanges tothe
Rulesmade bythe CityBarrister or anychanges to
thresholds.
·
To seek assurancethat theCouncil hasappropriate
arrangementsto identifyand manage risks,ensure goodgovernanceand obtainassurance on compliancein its
procurementactivity.
8.
OtherMatters
•
To consider, approve or make recommendations in
respect of anyother mattersreferred toit bythe CityMayor,
ChiefOperating Officer(as theHead ofPaid Service)or a Directoror any Councilbody.
•
Toconsiderany
relevantmatters reservedfor Member-leveldecision asdetailed in
Rules ofProcedure.