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Audit Committee

Terms of Reference

Objectives

The Audit Committee shall undertake oversight of and advise the Corporation on all matters defined in the Post 16 Audit Code of Practice 2016-2017 Part 2. As a minimum the terms of reference for Audit Committees must reflect the Code of Practice outlined duties of an audit committee as reflected at ‘Primary Duties’ at point 4 below. In so doing the Committee shall ensure that the internal control systems, including audit activities, of the Corporation and any of its subsidiaries are monitored actively, independently and objectively. To provide a medium for communication with the Corporation’s auditors which is not controlled by College management. To provide advice to the Corporation on matters of a financial nature which fall outside of the Code of Practice (as reflected at ‘Other Duties’) below.

Membership

1. The Committee shall consist of four members, plus any co-opted members. The Committee may invite the Corporation’s advisers or other third parties to attend meetings of the Committee as appropriate (such persons shall not have a vote but shall be entitled to speak at the meeting).

2. The Principal, the Chair of the Corporation and the student members may not sit on the Committee.

3. In order to maximise the Committee’s independence and objectivity members of the Corporation’s Finance and Resources Committee shall not be eligible to sit on the Committee.

4. The Committee shall not adopt an executive role.

5. The Chair of the Committee shall be approved by the Corporation and shall have relevant financial/audit expertise.

6. Membership of the Committee shall include individuals with an appropriate mix of skills and experience to allow it to discharge its duties effectively.

7. In the absence of the Chair, the members attending the meeting shall select one of their number to ‘Chair’ that meeting.

8. The Clerk to the Corporation shall act as Clerk to the Committee.

Frequency of Meeting and Quorum

9. The Committee shall meet at least three times a year. Additional meetings may be called as necessary in agreement with the Chair. The internal or external auditors may request a meeting of the Committee if they consider that one is necessary and the Committee will endeavour to comply with such requests.

10. The quorum for meetings of the Committee shall be two Corporation members

Duties

Primary Duties

The primary duties of the Committee shall reflect the Post 16 Audit Code of Practice 2016 -2017 which are to:

11. Assess and provide the Corporation with an opinion on the adequacy and effectiveness of the College’s audit arrangements, framework of governance, risk management and control, and processes for the effective and efficient use of resources, the solvency of the institution and the safeguarding of its assets.

12. Advise the Corporation on the appointment, reappointment, dismissal and remuneration of the financial statements and regularity auditors and other assurance providers, including internal auditors, and establish that all such assurance providers adhere to relevant professional standards.

13. Inform the Corporation of any additional services provided by the financial statements, regularity and other audit and assurance providers and explain how independence and objectivity were safeguarded.

14. Monitor, within agreed timescales, the implementation of recommendations arising from the management letters and reports of the financial statements and regularity auditor, and of any reports submitted by other providers of audit and assurance services to the College.

15. Oversee the College’s policies on fraud and irregularity and whistleblowing, and ensure the proper, proportionate and independent investigation of all allegations and instances of fraud and irregularity; that investigation outcomes are reported to the Audit Committee; that the external auditors (and internal auditors where appointed) have been informed, and that appropriate follow-up action has been planned /actioned, and that all significant cases of fraud or suspected fraud or irregularity are reported to the Chief Executive of the appropriate funding body.

16. Produce an annual report for the Corporation. The annual report must summarise the Committee’s activities relating to the financial year under review, including any significant issues arising up to the date of preparation of the report, and any significant matters of internal control included in the management letters and reports from auditors or other assurance providers. It must include the Committee’s view of its own effectiveness and how it has fulfilled its terms of reference. The report must include the Audit Committee’s opinion on the adequacy and effectiveness of the College’s audit arrangements, its framework of governance, risk management and control, and its processes for promoting economy, efficiency and effectiveness. The annual report must be submitted to the Corporation before the Statement of Corporate Governance and Internal Control in the accounts is signed. A copy of the Audit Committee’s annual report must be submitted to the relevant funding body with the annual accounts.

Other Duties

The other duties of the Committee shall be to:

17. Advise the Corporation on risk management by becoming familiar with the concepts and requirements of risk management.

18. Receive a report on the College’s risk register and management plan at each meeting and recommend the College’s risk register and management plan to the Corporation Board. The appraisal of relevant risks is delegated from the audit committee to the committee responsible for that risk. The Audit Committee oversees the risk register for the College Redevelopment Project.

19. Recommend the College’s Board Assurance Framework and Business Continuity Plan to the Corporation Board.

20. Monitor risks in line with the three lines of defence approach adopted by the Board Assurance Framework at each meeting.

21. Receive the full accounts of the College and of its subsidiaries and, in conjunction with the Finance and Resources Committee, to recommend approval to the Corporation if appropriate.

22. Recommend to the Corporation the College’s Financial Regulations, in conjunction with the Finance and Resources Committee.

23. Receive and review reports relating to audit prepared by the Funding Council, National Audit Office and other similar bodies.

Approved by the Corporation July 2017

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