Audit Committee Terms of Reference 1. Statement of Purpose The Audit Committee is a Committee of the Governing Body of the University which shall assure Governing Body of proper financial management, effectiveness of internal control and risk management systems, and economy, efficiency and effectiveness of the University s activities. 2. Membership and Meetings Membership The membership of the committee shall be appointed by the Governing Body. The Committee shall consist of five members, two of whom shall be external members of the Governing Body and three of whom shall be external to and independent of the University. At least one member shall have recent and relevant financial/accounting experience at a senior level in industry, accounting practice or higher education. In appointing members consideration shall be given to the skills and independence of members. The Chairperson of the Committee shall be appointed by the Governing Body on the nomination of the Chair of Governing Body and shall be one of the external Governing Body members of the Committee. Members of the governing authority who hold executive responsibility within the University should not be members of the Audit Committee. Neither the President or Chairperson of the Governing Body shall be a member of the Audit Committee. The Committee shall draw up its own working procedures. Frequency of meetings The Committee shall meet at least four times a year. Quorum The quorum necessary for the transaction of business shall be 3. The meeting shall not be deemed quorate unless at least one member external to the University and at least one external member of the Governing Body, is present. A duly convened meeting of
the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee. Attendance at Meetings The Bursar/Chief Financial Officer, Head of Internal Audit, the Officer responsible for Risk Management, a representative of the external auditors engaged by the Governing Body and any employee or external person relevant to the work of the Committee, may attend for all or part of meetings at the invitation of the Committee. At least once a year the Committee shall meet separately with each of the following: (a) the external auditors, (b) the Head of Internal Audit and (c) the Officer responsible for Risk Management, without members of management being present. The Committee will meet regularly with a representative of the Office of the Comptroller & Auditor General. 3. Mandate The Committee is authorised by the Governing Body to investigate any activity within its terms of reference and to seek any information it may require on that activity from any employee of the university or its subsidiaries and all such employees are directed to co operate with the Committee. The Committee shall be given the necessary resources for this purpose. The Committee is authorised by the Governing Body to obtain outside legal or other independent professional advice, if it considers this necessary. 4. Terms of Reference The terms of reference of the Committee are as follows- Financial Statements To review the draft annual financial statements of the University and consolidated statements, and their format, taking account of all relevant considerations and of accounting standards and legal requirements, before they are submitted to the Governing Body; To recommend to the Governing Body whether it should approve any accounts so reviewed by the Committee; To determine at least annually whether, in the Committee s opinion, the University has kept proper books of account.
External Audit To advise the Governing Body on the appointment of the external auditors, the audit fee and any questions of resignation or dismissal of the external auditors; To discuss with the external auditor, before the audit commences, the nature and scope of the audit; To discuss problems and reservations arising from the audit and any other matters requested by the external auditors; To review the external auditor s Management Letter and all other audit letters from the external auditors and to consider management s response; To monitor the performance and quality of the external auditor s work and the auditor s independence from the University; To obtain from the external auditor up- to- date information to enable the Committee to monitor the University s relationship with the auditor, including but not limited to information relating to the auditor s affiliates; To recommend, taking account of the legal provisions, whether or not to award contracts to an auditor or an affiliate for non-audit or audit- related work. To assess annually the external auditors independence and objectivity taking into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any nonaudit services; To develop and implement a policy on the supply of non-audit services by the external auditor, taking into account any relevant ethical guidance on the matter. Internal Controls and Risk Management To approve the Charter for Internal Audit; To satisfy itself that the arrangements made for, and resources available to Internal Audit are suitable, and to monitor performance of Internal Audit; To consider the system of internal financial controls and to satisfy itself that the control environment is adequate and that controls are operating effectively; To keep under review and advise on the operation and effectiveness of the University s risk management systems; To provide an opinion annually on the proposed statement of internal controls and on any legal compliance requirements; To consider the Internal Audit annual audit programme, to review reports of the Head of Internal Audit and to consider major findings and management s response.
Review The Committee shall review and challenge where necessary: the consistency of, and any changes to, accounting policies on a year on year basis; the methods used to account for significant or unusual transactions where different approaches are possible; whether the University has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor; the clarity of disclosure in the University s financial reports and the context in which statements are made; all material information presented with the financial statements; Other To monitor the effectiveness of Risk management in relation the risks identified as fundamental to the success or failure of the University s Strategic Plan; To consider reports by the Comptroller and Auditor General and management s response; To satisfy itself that arrangements are in place to promote economy, efficiency and effectiveness in the University s activities; To consider other topics, as requested by the Governing Body or initiated by the Committee; To promote co-ordination between the University s internal and external auditors. Delegated Authority The Audit Committee is delegated the authority by the Governing Body to investigate any matters within its terms of reference. The Audit Committee may establish such sub-committees as it deems necessary to fulfil its terms of reference. Internal Audit The Audit Committee will determine whether the appropriate level of support is available for the Internal Audit Office to ensure that it is adequately resourced to enable it to function effectively at all times.
In the event of the Committee determining that the level of support is not adequate it will report that fact to the President and the Governing Body. 5. Reporting Arrangements Minutes or reports of meetings of the Committee shall be circulated to each member of the Governing Body and shall make an annual written report on its activities to the Governing Body within three months of the conclusion of the financial year. The annual report shall include the Committee s opinion on the adequacy of the systems of internal controls and risk management. The Committee shall report to meetings of the Governing Body on such other occasions as requested. 6. Period of Office The period of office of the Audit Committee shall be contemporaneous and co-terminus with the period of office of the Governing Body. A member of the Audit Committee shall not hold office for longer than 10 years. 7. Administrative Support The Audit Committee will determine appropriate administrative support. 8. Information and Contact Web Address: E-mail address of Committee Secretary: Version 3 Approved by: Date Governing Body 6 November, 2012