Committee details

Audit and Risk Committee

Purpose of committee


Terms ofReference


(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 ofthe Constitutionunless explicitly detailedbelow.


2.            Membership

The Committeeshall comprise nine Members, madeup of eight Non- ExecutiveElected Councillors and one Independent Person.A quorumof atleast threeCouncillors willbe 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.


3.            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.


4.            Frequencyof meetingsand agendas

Meetings shallbe heldnot lessthan fourtimes a year.


5.            Duties

The dutiesof theCommittee shallbe asset outin theannexed scheduleto these Terms of Reference.

To supportand assistCommittee membersundertaking theirduties andextending their knowledge, regular briefings or training will be providedby officers.


6.            Authority

The Committeehas theresponsibilities detailedin Annex1. TheCommittee is authorised by the Council to investigate any activity withinits 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 theHead ofPaidServiceifithasexercisedthis authorityto seekinformation (otherthan 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.


7.            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.



Duties of theAudit &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 onthe Roleof theHead ofInternal Auditin PublicService 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 accountsand theannual Letterof Representationon behalfof theCouncil.

      To bringto theattention ofthe Councilany concernsarising fromthe financialstatements or from theaudit.

      To receiveperiodic reportsproviding updateson accountingand financialdevelopments.


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 Statementand Strategy,ensuring itis compliantwith thestatutory dutiesrequired bythe CivilContingencies Act2004 andcontinues toaligntointernationalandnational standardsand goodpractice 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 environmentand 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

·         Toconsider anannual reporton complaints,including theLocal Governmentand SocialCare Ombudsman’sannual reviewletter and recommendation.

·         Toconsider 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.



Contact information

Support officer: Angie Smith, Democratic Support Officer.

Postal address:
Leicester City Council
City Hall
115 Charles Street

Phone: (0116) 454 6354