Audit Committee

Two, of whom at least one must be a member of Council.

The Audit Committee will normally have five members, with a quorum of two, of whom at least one must be a member of Council.  In the absence of the Chair, another member of Council will act as Chair.

The Chair of the Committee will be the Treasurer.  The other members of the Committee will be nominated by the Nominations Committee of Court, for appointment by Council.  As a minimum, the Treasurer and one other member of the Committee will be members of Council.   The Chair of Council will not normally be a member of the Committee.  No member will be employed by the University or have executive responsibility for the management of the University.  At least one member will have a background in finance, accounting or auditing, and members with particular expertise may be co-opted.

Two nominated Pro Vice-Chancellors will usually attend the meeting together with the Registrar, the Finance Director, a representative of the External Auditor, a representative of the Internal Auditor and the Deputy Secretary. The Vice-Chancellor will attend once per year by agreement with the Chair.

The Governance Officer will act as the Committee’s secretary.

At least once a year the internal and external auditor will meet the Committee without University officers other than the Secretary being present.

Meetings will normally be held three times a year, and the external or internal auditors may request additional meetings if they consider it appropriate. In 2013/14 there will be four meetings.

A report of meetings of the Audit Committee will be circulated to all members of Council. 

The Committee will also prepare an annual report covering the institution’s financial year and any significant issues up to the date of preparing the report. The report will be addressed to Council and the Vice-Chancellor, and will summarise the Audit Committee’s activity for the year. Once the report has been accepted by Council and the Vice-Chancellor, it will be submitted to HEFCE. The report will include the Committee’s opinion of the adequacy and effectiveness of the University’s arrangements for the following:

• risk management, control and governance (the risk management element includes the accuracy of the statement of internal control included with the annual statement of accounts).
• economy, efficiency and effectiveness (value for money).
• the management and quality assurance of data submitted to HESA, HEFCE and other funding bodies.
• the reporting of serious incidents[1] internally and externally to HEFCE.

This opinion should be based on the information presented to the committee. The audit committee annual report should normally be submitted to the governing body (Council) before the members’ responsibility statement in the annual financial statements is signed.

[1]Specific examples of Serious Incidents would include: Loss of assets: donations from unknown donors or unverifiable sources: abuse or mistreatment of beneficiaries; disqualification of a trustee; links with terrorism or proscribed organisations; or bribes and inducements.

The Committee may investigate any activity within its terms of reference, seek any information it requires from members of staff and obtain outside legal or other independent professional advice. All employees are directed to cooperate with any request made by the Committee.

The Audit Committee acts as the key conduit for the reporting of all serious incidents, both financial and non-financial. Incidents will be reported to the Audit Committee as they are identified, and to HEFCE by either the Finance Office or the Planning Office. All incidents will also be recorded in the Audit Committee Annual Report to Council and HEFCE. In addition to reporting incidents as they arise, the University will undertake a specific annual check each autumn to identify any incidents during the previous academic year that might have been missed, and will report any such incidents to the Audit Committee.

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 members’ responsibilities, 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 the governing body.

The Scope of the Audit Committee’s work includes the following:

• advise Council on the appointment of the external auditors, the audit fee, the provision of any non-audit services by the external auditors and any questions of resignation or dismissal of the external auditors;
• discuss in advance with the external auditors the nature and scope of the audit;
• discuss with the external auditors problems and reservations arising from the interim and final audits, including a review of the management letter incorporating management responses, and any other matters the external auditors may wish to discuss, in the absence of management where necessary;
• consider and advise the Vice-Chancellor on the appointment and terms of engagement of the internal audit service, the audit fee, the provision of any non-audit services by the internal auditors and any questions of resignation or dismissal of the internal auditors;
• review the internal auditors’ audit needs assessment and the audit plan; consider major findings of internal audit investigations and management’s response; promote co-ordination between the internal and external auditors; and advise Council whether the resources made available for internal audit are sufficient to meet the University’s needs;
• keep under review the effectiveness of the University’s arrangements for risk management, control and governance; and in particular review the external auditors’ management letter, the internal auditors’ annual report and management responses;
• review the implementation of agreed audit-based recommendations;
• review the University’s policies on serious fraud and irregularity;
• ensure that all significant losses have been properly investigated and that the internal and external auditors, and where appropriate the HEFCE accounting officer, have been informed;
• review whether satisfactory arrangements are in place to promote economy, efficiency and effectiveness or value for money;
• receive relevant reports from the National Audit Office, HEFCE and elsewhere;
• review annually the performance and effectiveness of the external and internal auditors and make recommendations to Council concerning their reappointment;
• consider elements of the annual financial statements in the presence of the external auditor, including the auditor’s formal opinion, the statement of members’ responsibilities, and the statement of internal control, in accordance with the funding councils’ accounts direction;
• consider the extent to which it is appropriate to comment upon the above issues within its Annual Report to Council/Vice-Chancellor/HEFCE;
• report to Council as to whether, on the basis of the work it has undertaken, the Audit Committee is aware of any reason why Council should not approve the financial statements and;
• consult with the University Secretary’s Office on the first occasion that any proposed amendment to the University Statutes and Ordinances is discussed.

Getting to Grips with Audit (PDF, 320kb)

CUC Guidance for Members of the Audit Committee (PDF, 373.4kb)

• 9 September 2013, 14:00
• 5 November 2013, 14:00
• 11 February 2014, 14:00
• 6 May 2014, 14:00