Terms of reference

1. Title of Committee: Audit Committee

2. Status of Committee: Standing committee of the Council

3. Responsibilities delegated to the Committee by the Council:

3.1 The provision of an independent assessment of the School’s arrangements for internal control, risk management, financial reporting, governance and value for money.

4. Authority delegated to the Committee by the Council:

4.1 Authority delegated to the committee to make recommendations to the Council:

4.1.1 The Committee shall recommend to Council the level of resources required to provide an appropriate level of service for internal and external audit.

4.1.2 The Committee shall recommend to Council the basis on which internal audit services should be provided.

4.1.3 The Committee shall as necessary, having monitored the School’s risk procedures to ensure they are functioning effectively, make recommendations to Council regarding the effectiveness of risk procedures.

4.2 Authority delegated to the committee to make recommendations to the Court:

4.2.1 The Committee shall recommend to the Court the selection, appointment and basis of remuneration of the external auditor (normally as the result of a tender exercise), the provision of any non-audit services by the external auditor and any questions of resignation or dismissal of the external auditor.

4.3 Authority wholly delegated to the committee to act on behalf of the Council and Court:

4.3.1 The Committee shall exercise general oversight of operational audit, of accounting policies, and of financial statements and procedures.

4.3.2 The Committee will approve the external auditor’s fee in years other than those in which tendering exercises are carried out.

Operational Audit

4.3.3 The Committee shall satisfy itself that financial, risk management and other internal control systems are operating effectively and will monitor the performance and effectiveness of external and internal audit.

4.3.4 The Committee shall comment on aspects of the School's governance arrangements as appropriate.

4.3.5 The Committee shall review audit needs assessments and related annual internal audit plans, receive and consider periodic reports from the Internal Auditor together with management responses and shall additionally receive and consider annual reports from the Internal Auditor.

4.3.6 The Committee shall satisfy itself that satisfactory arrangements are in place to promote economy, efficiency and effectiveness.

4.3.7 The Committee shall seek to promote co-ordination between the internal and external auditors.

4.3.8 Before each annual audit commences, the Committee shall discuss with the external auditors the nature and scope of the forthcoming audit.

4.3.9 Before the conclusion of each annual audit the Committee shall review with the external auditors the annual financial statements and express a view on them to the Court. In carrying out this review, the Committee shall have regard to the external auditors' formal opinion, annual management letter and any related reports.

4.3.10 At least once in each year, the Committee shall meet the external and internal auditors without any officers being present.

Accounting and Financial Policies and Procedures

4.3.11 The Committee shall satisfy itself that accounting procedures, including systems of internal check, are adequate to safeguard the School's resources against inefficiency, waste and fraud.

4.3.12 The Committee shall oversee the School's policy on fraud and irregularity, including the notification to it of any action taken under that policy.

4.3.13 The Committee shall ensure that any significant losses are properly investigated and reported in accordance with the policy on fraud and irregularity and that in appropriate cases the HEFCE Accounting Officer is informed.

4.3.14 The Committee shall consider any relevant reports from the National Audit Office, the HEFCE and other organizations.

Risk

4.3.15 The Committee shall keep under review and report to Council on the effectiveness of the School's risk management arrangements.

4.3.16 The Committee shall report, initially to Risk Committee, any matters arising from the work of internal or external audit or other sources (eg consultants) which have risk policy implications.

4.3.17 The Committee shall inform the Council directly of any major risk policy issues arising which are judged to require its urgent attention.

5. Arrangements for the Committee to report to the Council on the exercise of its delegated authority:

5.1 Subject to 4.2.1 the Committee shall make such arrangements as it considers appropriate to fulfil its responsibility to keep Council informed of its work.

5.2 The Committee shall respond to any requests for information initiated by the Council.

6. Arrangements for the performance of the functions, duties and responsibilities delegated:

6.1 The Committee is authorised by the Council to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee, and all employees are directed to co-operate with any request made by the Committee.

6.2 The Committee is authorised by the 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 Chairman of the Council.

6.3 The Committee shall maintain close liaison with the Risk Committee (and its Risk Management Group).

6.4 The Audit Committee shall normally meet at least 3 times a year.

6.5 The Committee will form a view on the School’s overall arrangements for governance and bring this into play in the review of the governance statement in the annual financial statement. It will be assisted to do so by the annual plans for internal audit including some aspect of the School’s governance arrangements, so that over a cycle all the important features will have been covered.

General Terms and Conditions applying to the delegation of powers by the Council to all committees

• The committee shall comply with the terms of the delegated authority.
• The Council may revoke or vary the delegation giving reasonable notice.
• It is the duty of each committee to keep the Council informed of its work as appropriate, or on request from the Council. Committees will be responsible for determining whether issues of significance they are progressing should be reported to Council for information/advice.
• Committees may handle expenditure decisions within existing budgets, but all proposals from committees involving additional expenditure beyond approved budgets should be referred to the APRC or FGPC, as appropriate.
• Committees may not change their annual objectives without the Council’s approval.
• Conditions as to quorum shall apply as decided by Council.

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