AC Terms of Reference & Constitution


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Audit Committee Terms of Reference and Constitution

Terms of Reference 1.

To advise the governing body on the adequacy and effectiveness of the FE college’s systems of internal control and its arrangements for risk management, control and governance processes, and securing economy, efficiency and effectiveness (value for money).

2.

To advise the governing body on the appointment, reappointment, dismissal and remuneration of the financial statements auditor and the internal audit service (IAS).

3.

To advise the governing body on the scope and objectives of the work of the IAS, the financial statements auditor and the funding auditor (where appointed).

4.

To ensure effective coordination between the IAS, the funding auditor (where appointed) and the financial statements auditor, including whether the work of the funding auditor should be relied upon for internal audit purposes.

5.

To consider and advise the governing body on the audit strategy and annual internal audit plans for the Internal Audit Service.

6.

To advise the governing body on internal audit assignment reports and annual reports and on control issues included in the management letters of the financial statements auditor (including their work on regularity) and the funding auditor (where appointed), and management’s responses to these.

7.

To monitor, within an agreed timescale, the implementation of agreed recommendations relating to internal audit assignment reports, internal audit annual reports, the funding auditor’s management letter and spot-check reports (where appropriate) and the financial statements auditor’s management letter.

8.

To consider and advise the governing body on relevant reports by the National Audit Office (NAO), the Skills Funding Agency (SFA) and other funding bodies, and, where appropriate, management’s response to these.

9.

To establish, in conjunction with FE college management, relevant annual performance measures and indicators, and to monitor the effectiveness of the IAS and financial statements auditor through these measures and indicators and to decide, based on this review, whether a competition for price and quality of the audit service is appropriate.

10.

To produce an annual report for the governing body and accounting officer, which should include the committee’s advice on the effectiveness of the FE college’s risk management,

control and governance processes, and any significant matters arising from the work of the IAS, the funding auditors (where appointed) and the financial statements auditor. 11.

To ensure that all allegations of fraud and irregularity are properly followed up.

12.

To be informed of all additional services undertaken by the IAS, the financial statements auditors and the funding auditors (where appointed).

Constitution Membership 1.

The Audit Committee shall comprise 5 members appointed by the Corporation, but excluding the Chair of the Corporation, the members of the Finance & Resources Committee, the Principal and any Staff Governor with significant executive, management, financial or budgetary responsibilities.

2.

Members of the Corporation appointed as members of the Committee shall hold the latter office for the duration of their membership of the Corporation unless they resign in writing as a member of the Committee.

3.

The number of members of the Committee who are not members of the Corporation shall not exceed 20% of the membership number of the Committee.

Chair of the Committee 1.

The Chair of the Committee shall be a member of the Corporation appointed by the Corporation.

2.

If the Chair is absent from a meeting, the Committee shall appoint one of their number as Chair for the meeting, provided that the member chosen is other than a staff or student member or a member who is not a member of the Corporation.

Quorum The quorum for meetings of the Committee shall be at least 40% of the membership number of the Committee. Access to and Attendance at Committee Meetings 1.

Any question in respect of allowing access to meetings by persons other than members of the Committee or the Clerk shall be decided by the Committee at the relevant meeting.

2.

The internal auditors should normally attend, as a minimum, all meetings where internal audit plans and reports are to be discussed. The external auditor should normally attend any meetings where the management letter or other report is to be considered.

3.

The Committee may require or invite the Principal, senior and other College managers, members of staff, professional advisers or other parties to be in attendance at meetings or parts thereof as appropriate.

Regularity of Meetings The Committee shall be scheduled to meet at least termly. Clerking of the Committee The Clerk to the Corporation shall normally act as Clerk to the Committee, but may designate a suitably qualified Deputy when necessary and appropriate; such designation to concur with the provisions of the Instrument of Government. Reporting and Publication of Committee Business 1.

The business undertaken by the Committee shall be reported to the Corporation through a report to each meeting of the Corporation setting out the Committee’s recommendations and key actions/discussion points.

2.

Committee papers, other than those received in draft form, shall be published unless a specific decision to exclude from publication is taken by the Committee, in which case the reason will be recorded. Papers received in draft form shall normally be withheld from publication in order to avoid possible confusion between draft and final versions. Should the Committee decide to publish a paper in draft form, the reason will be recorded.