Terms of Reference
The Council has established an Audit and Risk Committee to support its responsibilities in the areas of principal risk, control and governance and associated assurance as follows:
- Review the comprehensiveness of assurances in meeting the Council and Chief Executive’s assurance needs;
- Review the reliability and integrity of these assurances;
- Provide an opinion on how well the Council and Chief Executive are supported in decision making and in discharging their accountability obligations (particularly in respect of financial reporting and risk management.
The conduct of business of the Audit and Risk Committee is governed by the Council’s Standing Orders for Committees.
The Council will make appointments to the Committee, including the Committee Chair, for a term of office of up to four years.
The Chair of the Council must not be the Chair of the Audit and Risk Committee.
The Committee will consist of a Chair and up to three other Council Members and one independent member.
The Committee may co-opt such other person as it deems necessary for the proper execution of its duties. All such appointments shall be made in consultation with the Chief Executive who will report the recommended appointment to the Council for approval.
Membership of the Committee will be reviewed at the end of each Member’s term of office with the possibility of re-appointment once only, for a further term of office of up to four years.
The Audit and Risk Committee will report back to the Council after each meeting.
The Audit and Risk Committee will provide the Council with an annual report, timed to support the finalisation of the accounts and the Statement on Internal Control, summarising its conclusions from the work that it has carried out during the year, with particular reference to the organisation’s principal risk, governance and internal control framework.
The Committee Chair, or in their absence, another member of the Committee will advise the Chair of the Council of the key issues arising from the Committee’s work and the Committee’s recommendations as appropriate in advance of the next Council meeting following a Committee meeting.
The Audit and Risk Committee will advise the Council on, and where appropriate make recommendations for changes to:
- CLC’s processes for principal risk, control and governance and the Statement on Internal Control;
- Assessing the effectiveness of principal risk & control processes
- CLC’s accounting policies, accounts and financial annual report. This should include accounting policies and practice, compliance with laws and accounting standards and major matters of judgment. It will also cover the process for review of the accounts prior to submission for audit, levels of errors identified, and management’s letter of representation to the external auditors;
- The planned activity and results of both internal and external audit;
- The adequacy of management’s response to the issues identified by audit activity including external audit’s management letter;
- Assurances relating to the corporate governance requirements for the CLC;
- Receive reports from Management on the effectiveness of the systems they have established
- The adequacy of anti-fraud and corruption policies and whistle-blowing processes;
- Where appropriate, proposals for tendering for either internal or external audit services and for purchase of non-audit services from contractors who provide audit services;
- The appointment or dismissal of any external organisation appointed to provide internal audit services;
- The appointment, resignation or dismissal of any external organisation appointed to provide external audit services;
- The effectiveness of the internal audit function including the internal audit strategy and plan including the nature and scope of their audit programme and the planning, undertaking and management of the internal audit process;
- The effectiveness of the external audit function including the external audit plan including the nature and scope of their audit programme and the planning, undertaking and management of the external audit process;
- The fees and annual costs of internal and external audit;
- The review of the operation of the CLC’s Code of Conduct;
- Any other matters referred to it by the Council;
Review of Effectiveness
The Audit and Risk Committee will annually review its own effectiveness and terms of reference and report the results of that review to the Council, including any recommendations for change.
The Chair of the Committee will bi-annually review the performance of members and this will be included as part of the annual appraisal of the relevant Council members completed by the Council Chair. These individual annual reviews will be used as the basis for assessment of members at the point of re-appointment. The Chair of the Council will review annually the performance of the Chair of the Committee.
The Committee is authorised by the Council to review or investigate any activity within its terms of reference.
The Committee is authorised by the Council to require members of Staff to undertake such additional activity as it deems appropriate within its terms of activity.
The Committee may delegate some of its powers as appropriate to members of Staff on the recommendation of the Chief Executive in accordance with a scheme of delegation approved by Council
The Committee is authorised to obtain independent legal or professional advice as approved in the budgets to support its decision making.
The representatives of internal and external audit will have free and confidential access to the Chair of the Audit and Risk Committee between meetings, and the Audit and Risk Committee if required at each meeting.
The Chief Executive will have free and confidential access to the Audit and Risk Committee and to its Chair.
The Audit and Risk Committee will meet at least twice a year. The Chair of the Audit and Risk Committee may convene additional meetings when considered necessary.
Meetings will be scheduled to coincide with key dates in the audit and financial reporting cycle and, as far as possible, in close proximity and prior to Council meetings
A minimum of three members of the Committee will be present for the meeting to be quorate.
Audit and Risk Committee meetings will normally be attended by the Chief Executive, a representative of internal audit and, if appropriate, a representative of external audit.
The Audit and Risk Committee may instruct other members of Staff to attend to assist it with its discussions on any particular matter.
The Audit and Risk Committee may ask any or all of those who are not members to withdraw to facilitate open and frank discussion of particular matters.
The Council, Chief Executive, internal audit or external audit may ask the Audit and Risk Committee to convene further meetings to discuss particular issues on which they seek the Committee’s advice.
The Audit and Risk Committee will be provided with the following at each meeting:
- A report summarising any significant changes to the CLC’s principal risk register;
- A progress report from internal audit summarising work performed (and a comparison with work planned), key issues emerging from internal audit work, management’s response to audit recommendations, changes to the periodic plan, any resourcing issues affecting the delivery of internal audit objectives;
- Internal and External Audit will have an opportunity at each meeting to raise any issues with the Committee without any member of Staff being present.
In addition, as and when appropriate, the Committee will receive:
- External audit’s audit strategy
- The internal audit strategy
- Proposals for the terms of reference of internal audits
- Full reports and follow up reports from internal audit investigations
- The internal audit’s annual opinion and report; quality assurance reports on the internal audit function
- A progress report from the External Audit representative
- The CLC draft accounts
- The CLC’s draft Statement on Internal Control
- A report on any changes to accounting policies
- External audit’s management letter
- A report on any proposals to tender for audit functions
- A report on co-operation between internal and external audit
- Any other material that the Committee reasonably requires in order to fulfil its responsibilities.
The Anti-Bribery Act
The CLC prides itself on maintaining the highest standards of ethical behavior and as such strictly prohibits the offer, giving or acceptance of bribes by Council and Committee members, Directors, employees and all other parties working on its behalf.
The CLC aims at all times to limit its exposure to the risk of bribery and corruption by:
- Setting out a clear Anti-bribery Policy in its staff handbook;
- Training all employees so that they can recognise and avoid the use of bribery by themselves and others;
- Encouraging employees to be vigilant and to report any suspicion of bribery, providing them with suitable channels of communication and ensuring sensitive information is treated appropriately;
- Rigorously investigating instances of alleged bribery and assisting the police and other appropriate authorities in any resultant prosecution;
- Taking firm action against any individual(s) involved in bribery.
The Council is wholly committed to ensuring the CLC conducts business in an ethical manner and without bribery. As such, the CLC’s Anti-bribery Policy and its zero tolerance provisions apply to all Council and Committee members, Directors and employees of the CLC, and to all other parties, agents or bodies acting on the CLC’s behalf.
Agreed at July 2015 Council Meeting