Audit and Risk Committee

The Audit and Risk Committee assists the Council in meeting its obligations in terms of governance, risk and internal controls.

Meetings

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Members

Chair:

To be appointed.

Deputy Chair:

Deputy Mayor Jenny Duncan.

Members:

Cr David Bennett, Cr Kate Joblin, Rex McKinnon, Eileen O'Leary

Frequency of Meetings:

Quarterly.

Quorum:

Standing Order 10.2 (amended by Council resolution 4 April 2017).

Senior Officers:

Chief Executive, General Manager Finance, General Manager Strategy

Terms of Reference (revised 9 October 2018)

Purpose

The purpose of the Audit and Risk Committee is to assist the Council to discharge its responsibilities to exercise due care, diligence and skills in relation to the oversight of:

  • the robustness of risk management systems, processes and practices
  • a forward work programme, which will consist of reviews of specific risks using the 'Deep Dive' methodology, the delivery of the internal audit work programme and a regular review of the Risk Register
  • the robustness of the internal control framework and financial management policies
  • compliance with applicable laws, regulations, standards and best practice guidelines
  • the establishment and maintenance of controls to safeguard the Council's financial and non-financial assets
  • reviewing Council's Fraud and Protected Disclosures policies, and other relevant policies and procedures
  • the oversight of risk management and assurance across the Council's CCOs with respect to risk that is significant to Council.

The role of the committee is to gain an assurance that there is a robust process to manage risks appropriately. In fulfilling their role on the Audit and Risk Committee, members shall be impartial and independent at all times.

Delegated authority

The Council has delegated to the Audit and Risk Committee the necessary authority to effectively carry out the tasks assigned to it. The committee shall have the delegated authority to approve the appointment of the internal auditor of risk management and internal audit programmes, audit engagement letters and letters of undertaking for audit functions and additional services provided by the external auditor.

Decision-making powers

The Committee has no decision-making powers. The Committee may request expert advice through the Chief Executive, as necessary. The Committee may make recommendations to the Chief Executive, as necessary.

Voting

Voting is limited to members of the Audit and Risk Committee and Mayor ex officio.

Key attributes of members

Members should bring the following attributes:

  • the ability to act independently and objectively
  • the ability to ask relevant and pertinent questions, and evaluate the answers
  • the ability to work constructively with management to achieve improvements
  • business acumen
  • appropriate diligence, time, effort and commitment.

Independent members should have the following experience:

  • broad governance experience
  • familiarity with risk management disciplines (identification, evaluation and management)
  • understanding of internal control and assurance frameworks
  • a good understanding of the roles of internal and external audit
  • financial reporting and analysis from a risk perspective.

Responsibilities

Risk

Monitor the effectiveness of risk identification and mitigation measures, in addition to assessing the impact of emerging risks by:

  • reviewing the Risk Register, Risk Framework, policy and associated procedures for effective identification and management of the Council's financial and business risks
  • maintaining visibility of emerging risks.

Internal audit, internal controls, and fraud controls

Assess the effectiveness of the Council's internal controls and internal audit functions, by reviewing:

  • the appropriateness and effectiveness of controls in place to safeguard Council's assets
  • the adequacy of the Council's fraud and associated policies
  • the effectiveness of existing corporate policies and recommending changes or new policies where appropriate
  • management's legislative compliance programme.

Treasury, insurance and long-term planning

Monitor risks associated with the Council's treasury function, including:

  • the Council's treasury policies
  • the Council's annual Insurance contract, satisfying itself the Council has appropriate and affordable insurance cover in place
  • the Council's long-term planning including its financial strategy.

External audit

Review external audit function, including:

  • confirming processes are in place to ensure the completeness and quality of financial and operational information being provided to the Council
  • liaising with the external auditors as required
  • monitoring the Council's external audit programme and processes
  • receiving the Audit Management Report and monitoring progress by management on implementing recommendations contained within the Report.

Statutory reporting

Review and monitor the integrity of the interim and annual reporting including statutory financial statements and other formal announcements relating to the Council's financial performance, including:

  • the appropriateness of accounting policies and standards
  • compliance with applicable legal requirements relevant to statutory reporting
  • the extent to which financial statements are affected by any unusual transactions and the manner in which they are disclosed
  • the clarity of disclosures generally
  • the basis for the adoption of the ongoing concern assumption
  • significant adjustments resulting from the audit.

Council Controlled Organisations (CCOs)

The committee will enquire to ensure adequate processes at a governance level exist to identify and manage risks within a Council Controlled Organisation (CCO).

Other tasks

Other tasks as delegated to the Audit and Risk Committee by the Council, which may include the allocation of special project oversight.

Review of Terms of Reference

The Terms of Reference will be reviewed by the Council following every triennial election.

Notes:

  • The Chief Executive is required to attend all meetings but is not a member and has no voting rights.
  • Members are appointed for an initial term of no more than three years that aligns with the triennial elections, after which they may be eligible for extension or reappointment.
  • Appointment of external members is by contract.
  • External member contracts are to be reviewed and assessed six (6) months after each triennial election.