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AUDIT COMMITTEE

TERMS OF REFERENCE


1. Authority

1.1. The Audit Committee is a Committee of the Board of the Arts Council. It is an advisory committee with no executive responsibility. 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. The Committee has no decision making powers but should make recommendations to Council for approval.

1.2. The Committee requires to be adequately resourced and is authorised by the Council to obtain independent professional advice and to secure the attendance of non members with relevant experience and expertise if it considers this necessary.

2. Constitution and Membership

2.1. The Audit Committee will consist of a minimum of 3 members of the Council, of whom one will be appointed as Chairman of the Audit Committee. They will be appointed by the Chairman and Vice Chairman of the Council after consultation with the Chief Executive; and approved by the Council. Its members shall hold office for a period of time agreed by Council and be eligible for reappointment. Any member of the Audit Committee ceasing for any reason to be a member of the Council shall, ipso facto, cease to be a member of the Audit Committee and the vacancy shall be filled by the Council as soon as may be. Council members who are not members of the Audit Committee shall have the right of attendance.

3. Quorum

3.1. The quorum shall be 2 members of the Audit Committee one of which will be the Chairman.

4. Role of the Audit Committee

4.1. The Audit Committee provides a medium of communication from the Council’s auditors, which is not controlled by management. In particular the Committee should ensure that the internal control systems, including audit activities, of the Council are monitored actively, independently and objectively in order to:

4.1.1. Promote and ensure high standards of propriety, accountability and financial management within the Council;
4.1.2. Ensure that there is a reliable system of internal financial control operating within the Council
4.1.3. Improve the quality of financial reporting by reviewing internal and external financial statements on behalf of the Council;
4.1.4. Promote a climate of financial discipline and control which will help to reduce the opportunity for financial mismanagement or fraud;
4.1.5. Improve where necessary, the effectiveness of the Council's internal controls and mechanisms for achieving value for money and the extent to which these comply with requirements set down by the Department;
4.1.6. Reinforce the independence and effectiveness of the internal audit function;
4.1.7. Advise on the reliability of the Council's information systems;
4.1.8. Provide a sounding Council for management on issues of concern in relation to the Council's internal control systems; and
4.1.9. Contribute to the maintenance or increasing of public confidence in the quality of the Council's corporate governance and management.

5. Proceedings

5.1. The Committee should normally meet at least six times per year and may meet more often if any one member of the Committee, the Director of Corporate Services, the Finance Manager, the Council’s Internal Auditor or external audit manager shall so request.

5.2. The Chief Executive, the Director of Corporate Services (or equivalent) and the internal auditor should normally attend Audit Committee meetings. In the interests of ensuring the efficient use of staff time, other staff members may be required to attend for specific items. This to be agreed prior to the meeting.

5.3. The external auditor should attend all meetings of the Audit committee.

5.4. The Committee shall agree its meeting dates at the beginning of the year in question.

5.5. The agenda for each meeting of the Audit Committee shall be agreed with the Chair of the Committee and circulated, along with the papers, at least 7 days in advance to each member of the Audit Committee; and also to the Chairman of the Council, the Chairman of the Finance Committee, the Chief Executive, the Director of Corporate Services, the Finance Manager, the Internal Auditor and external audit manager (or their representative).

5.6. The Internal Auditor and the representative of External Audit will have free and confidential access to the Chair of the Audit Committee.

6. Reporting Procedures

6.1. The Chairman of the Committee should report verbally to Council at the following meeting and Audit Committee Minutes should be formally circulated to Council for noting in its Minutes.

6.2. The Committee will produce an annual report which it will submit to the Council, accompanied by the internal auditor's annual report.

7. Duties

7.1. The duties of the Committee should include:

7.1.1. Reviewing the processes for ensuring the effectiveness of the internal control systems involving internal financial control;
7.1.2. Advising the Council on the criteria for the selection and appointment of the internal audit service (and Internal Auditor if applicable);
7.1.3. Reviewing the scope and effectiveness of internal audit's work including planning and operation of the work and the internal audit annual report;
7.1.4. Ensuring that the Council has efficient and effective procedures in place so as to ensure that returns are accurate, timely and prepared in accordance with agreed procedures;
7.1.5. Ensuring the Council has systems and procedures to promote economy, efficiency and effectiveness this may require identifying specific value for money studies;
7.1.6. Considering the Council's annual financial statements and prior to submission to the Council, focusing in particularly on any changes in accounting policy, major judgmental areas, significant audit adjustments, the going concern assumption and compliance with accounting standards and the Accounts Direction;
7.1.7. Reviewing relevant reports from the Department, NIAO and other organisations;
7.1.8. Monitoring the performance and effectiveness of internal audit;
7.1.9. The appointment, remuneration and determination of scope and role of the internal auditor.
7.1.10. Providing a Risk Framework for the approval of Council and thereafter, an annual risk analysis.

7.2 The Audit Committee should ensure that all significant losses have been properly investigated and that the internal auditors, external auditor and the Department have been fully informed of the matter.