Terms of Reference
The Council shall appoint the Committee. All members of the Committee shall be independent non-executive members.
The Committee shall consist of:
- the Chair: a lay member of Council
- at least two lay members of Council in addition to the Chair
- 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 Office for Students. 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 Deputy Director of Finance, the COO, 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.
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.
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, the Student Loans Company, HEFCE, the Office for Students, Research England and other funding bodies
A.6 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 the Office for Students' Accounts Directions
A.7 to review the accounting policies relating to the financial statements, particularly in relation to any changes, and to comment on their adequacy
A.8 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 recommend to 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 understand the material risks to Loughborough University
C.2 to receive regular reports on the management of material risks
C.3 to assess, on behalf of Council, the scope and the effectiveness of the University's governance, policy and systems to manage and monitor financial and non-financial risk, on the understanding that Council retains ultimate responsbility for Risk
C.4 to consider, at each meeting, how matters arsing from the agenda (for example as a result of the internal audit reviews) address the material risks as identified in the strategic risk register and to highlight where material risks are not receiving sufficient oversight
C.5 to review, on an annual basis, the University's approach to risk assessment and risk management and to provide an annual statement to Council and the Office for Students on the effectiveness of the University risk management, control and governance arragements
C.6 to review the statements in the Uiversity's annual report and accounts on internal controls and the risk and opportunity management framework
D. Value for Money
D.1 to receive regular reports on work carried out to ensure Value for Money in the University's activities
D.2 to assess the scope and effectiveness of the Uiversity's Value for Money activities
D.3 to provide the statements in the University's annual report and accounts on the internal controls and the risk and opportunity management framework
E.1 to report to Council after each meeting
E.2 to review annually its Terms of Reference
E.3 to review annually its effectiveness
E.4 to advise Council on any issues within its terms of reference arising from the reports of the National Audit Office, the Office for Students, or other external bodies
E.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
E.6 to prepare an annual report to the Office for Students
E.7 to refer business to other committees as it sees fit.
Author – Sophie Crouchman
Revised November 2018