Loughborough University
Leicestershire, UK
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Loughborough University

University Committees

Audit Committee

Terms of Reference

 

1.1 Constitution

The Council shall appoint the Committee.  All members of the Committee shall be independent non-executive members.

The Committee shall consist of:

(i)   the Chair: a lay member of Council

(ii)  at least two lay members of Council in addition to the Chair

(iii) up to three co-opted members

The quorum shall be any three members including the Chair.  In exceptional circumstances the Chair may nominate another lay member to act as Chair.  On such occasion the Chair is unavailable to nominate, the Committee shall nominate its own Chair from the lay members.

Neither the Chair nor any member may also be a member of the Finance Committee unless with the specific authority of the HEFCE.  Members shall have no executive responsibility for the management of the University; and at least one shall have a background in finance, accounting or auditing.  The chair of Council should not be a member of the committee.

1.2 Attendance at Meetings

The Director of Finance, the Financial Accountant, the Secretary and the internal auditors shall attend meetings on a routine basis.  The Secretary shall not be a member of the Finance Office.  Other persons may attend at the invitation of the Committee, including the Vice-Chancellor, who shall normally attend on one occasion annually for a discussion of matters of interest to the Committee, especially risk and its management, financial management, and internal controls.  There shall normally be a meeting of Audit Committee with the external auditors in November, in advance of the presentation of the Statement of Accounts to Council at the end of November.  That meeting will be preceded by a private meeting between the Audit Committee and the external auditors, with only the Audit Committee Secretary in attendance.  Similarly a closed doors meeting with the internal auditors is to be held as required.

1.3 Frequency of Meetings

Meetings shall be held not less than four times a year, to include the meeting of Audit Committee with the External Auditors to review the Financial Statements.  The Chair of the Audit Committee may convene additional meetings as deemed necessary.

The Committee may ask any or all of those who normally attend but who are not members to withdraw to facilitate open and frank discussions.

1.4 Authority

The Committee is authorised by Council to obtain outside legal or other independent professional advice and to secure the attendance of non-members with relevant experience and expertise if it considers this necessary, normally in consultation with the designated officer and/or chair of Council.

The Audit Committee will review the audit aspects of the draft annual financial statements.  These aspects will include the external audit opinion, the statement of the responsibilities of Council, the statement of internal control and any relevant issue raised in the external auditors’ management letter.  The Committee should, where appropriate, confirm with the internal and external auditors that the effectiveness of the internal control system has been reviewed, and comment on this in its annual report to Council.

1.5 Duties

A.        Effectiveness and Financial and Other Control

A.1       to gain assurance on the effectiveness of financial and other internal control frameworks

A.2       to gain assurance on the University’s corporate governance arrangements

A.3       to gain assurance on the University’s policies and procedures in respect of fraud, irregularity and public interest disclosure

A.4       to gain assurance, annually or more frequently if necessary, on the implementation of approved recommendations relating to both internal and external audit reports and management letters

A.5       to gain assurance on the University’s management and quality of data submitted to HESA, HEFCE, the Student Loans Company and other funding bodies

A.6       to gain assurance on the University’s arrangements to secure value for money

A.7       to consider elements of the annual financial statements in the presence of the external auditors, including the auditors’ formal opinion, the statement of members’ responsibilities and the statement of internal control, in accordance with HEFCE’s Accounts Directions

A.8       review the accounting policies relating to the financial statements, particularly in relation to any changes, and to comment on their adequacy

A.9       in the event of the merger or dissolution of the institution, to ensure that the necessary actions are completed, including arranging for a final set of financial statements to be completed and signed

B.        Internal and External Audit

B.1       to recommend to Council the selection and appointment of the internal auditors, and to agree their remuneration; and, if required, to advise Council on their dismissal

B.2       to advise Council on the selection, appointment, remuneration and dismissal of the external auditors, and on the provision of any non-audit services by the external auditors

B.3       to promote co-ordination between the internal and external auditors

B.4       to review the reports of the external auditors, in particular the external auditors’ management letter and management responses; and to meet with the external auditors and relevant officers to discuss any issues arising therefrom

B.5       to keep under review the scope and effectiveness of the internal audit function, and monitor the planning and execution of internal audit work; to receive the annual report of the internal auditors and such other reports pertaining to internal audit as it shall require; and to meet with the internal auditors and relevant officers to discuss any issues arising therefrom

C.        Risk and Opportunity Management

C.1      to assess the scope and the effectiveness of the systems established by management to identify, assess, manage and monitor financial and non-financial risks and opportunities

C.2      to review the statements in the University’s annual report and accounts on internal controls and the risk and opportunity management framework

D.        Other

D.1      to report to Council after each meeting

D.2      to review annually its Terms of Reference

D.3      to review annually its effectiveness

D.4      to advise Council on any issues within its terms of reference arising from the reports of the National Audit Office, the Higher Education Funding Council or other external bodies

D.5      to prepare an annual report to Council on the work of the Committee, including an opinion on risk, control, governance, management and quality assurance of data and the pursuit of VFM

D.6      to prepare an annual report to HEFCE

D.7      to refer business to other committees as it sees fit.

 

 

Author – Sophie Crouchman

Revised March 2015

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