The Audit Committee is a key component of
corporate governance. It provides an independent and high-level
focus on the audit, assurance and reporting arrangements that
underpin good governance and financial standards.
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The purpose of the Audit
Committee is to provide independent assurance to the members of the
adequacy of the risk management framework and the internal control
environment. It provides independent review of governance, risk
management and control frameworks and oversees the financial
reporting and annual governance processes. It oversees internal
audit and external audit, helping to ensure efficient and effective
assurance arrangements are in place.
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GOVERNANCE, RISK AND CONTROL
To review the Council’s corporate
governance arrangements against the good
governance framework and consider annual governance reports and
assurances.
To review the Annual Governance Statement prior to
approval and consider whether it properly reflects the risk
environment and supporting assurances, taking into account internal
audit’s opinion on the overall adequacy and effectiveness of
the Council’s framework of governance, risk management and
control.
To consider the Council’s
arrangements to secure value for money and review assurances and
assessments on the effectiveness of these arrangements.
To consider the Council’s framework
of assurance and ensure that it adequately addresses the risks and
priorities of the Council.
To monitor the effective development and operation of
risk management in the Council.
To monitor progress in addressing
risk-related issues reported to the Committee.
To consider reports on the effectiveness
of internal controls and monitor the implementation of agreed
actions.
To review the assessment of fraud risks
and potential harm to the Council from fraud and
corruption.
To monitor the counter-fraud strategy, actions and
resources.
INTERNAL AUDIT
To approve the internal audit charter.
To review proposals
made in relation to the appointment of external providers of
internal audit services and to make recommendations.
To approve the risk-based internal audit
plan, including internal audit’s resource requirements, the
approach to using other sources of assurance and any work required
to place reliance upon those other sources.
To approve significant interim changes to
the risk-based internal audit plan and resource
requirements.
To make appropriate enquiries of both
management and the Chief Audit Executive to determine if there are
any inappropriate scope or resource limitations.
To consider reports from the Chief Audit
Executive on internal audit’s performance during the year,
including the performance of external providers of internal audit
services. These will include:
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Updates on the work of internal audit
including key findings, issues of concern and action in hand as a
result of internal audit work.
Regular reports on the results of the
Quality Assurance and Improvement Programme.
Reports on instances where the internal
audit function does not conform to the Public Sector Internal Audit
Standards and Local Government Application Note, considering
whether non-conformance is significant enough that it must be
included in the Annual Governance Statement.
To consider the Chief Audit Executive’s annual
report : -
The statement of the level of conformance
with the Public Sector Internal Audit Standards and Local
Government Application Note and the results of the Quality
Assurance and Improvement Programme that supports the statement
– these will indicate the reliability of the conclusions of
internal audit.
The opinion on the overall adequacy and
effectiveness of the Council’s framework of governance, risk
management and control together with the summary of the work
supporting the opinion – these will assist the Committee in
reviewing the Annual Governance Statement.
To consider
summaries of specific internal audit reports as
requested.
To receive reports outlining the action
taken where the Chief Audit Executive has concluded that management
has accepted a level of risk that may be unacceptable to the
Authority or there are concerns about progress with the
implementation of agreed actions.
To contribute to the Quality Assurance
and Improvement Programme and in particular, to the external
quality assessment of internal audit that takes place at least once
every five years.
To consider a report on the effectiveness
of internal audit to support the Annual Governance Statement, as
required by the Accounts and Audit Regulations.
To support the development of effective
communication with the head of internal audit.
EXTERNAL AUDIT
To consider the external auditor’s
annual letter, relevant reports, and the report to those charged
with governance.
To consider specific reports as agreed with the
external auditor.
To comment on the scope and depth of external audit
work and to ensure it gives value for money.
To commission work from internal and external
audit.
To advise and recommend on the
effectiveness of relationships between external and internal audit
and other inspection agencies or relevant bodies.
FINANCIAL REPORTING
To review the annual statement of
accounts prior to approval. Specifically, to consider whether
appropriate accounting policies have been followed and whether
there are concerns arising from the financial statements or from
the audit that need to be brought to the attention of the
Council.
To consider the external auditor’s
report to those charged with governance on issues arising from the
audit of the accounts.
TREASURY MANAGEMENT
To examine effectively the treasury management
strategy, policies and performance and recommend approval or
otherwise by Council, via Cabinet.
ETHICAL VALUES
To be satisfied that there are arrangements in place
to discharge the Council’s responsibility to promote and
maintain high standards of conduct.
To review the effectiveness of the Council’s
whistleblowing arrangements.
ACCOUNTABILITY ARRANGEMENTS
To report to full
council on a regular basis on the Committee’s performance in
relation to its terms of reference and the effectiveness of the
Committee in meeting its purpose.