Audit and Review Committee (constitution)

This committee operates in accordance with the Principles and Rules for the Operation of Committees available at  http://www.secretariat.uwa.edu.au/home/uwas_committee_system. Members must act in accordance with the University Committee Members' Code of Conduct available at http://www.secretariat.uwa.edu.au/home/uwas_committee_system.

Members must also act in accordance with the Senate Code which applies to Senate and Senate committees.  In accordance with the Code members must among other things:

• act always in the best interest of the University as a whole, with this obligation to be observed in priority to any perceived duty a member may owe to those electing or appointing him or her;

• maintain confidentiality and, except with the approval of the Chair or if required by State or Commonwealth legislation, not divulge information at any time to any person external to the committee.

The Senate Charter gives the Senate responsibility, among other things, for the stewardship of the University as an institution of excellence and integrity, for assisting the Vice Chancellor to maximise the University's performance and for the regular monitoring of that performance. Given that excellent performance is heavily dependent on the existence of sound governance systems, effective policies, and stringent performance monitoring processes, the Senate has a clear role in overseeing these, and has established the Audit and Review Committee to assist it in this task.

 

1. The Audit and Review Committee is a committee of the Senate.

Role

2.(1) The role of the committee is to—

(a) investigate financial matters within the University, either within an audit programme which it determines or as directed by the Senate;

(b) satisfy itself that the University has sound policies/arrangements in place for—

(i) corporate governance including adherence to ethical standards;

(ii) controlling the institution's exposure to risk and minimising its exposure to fraud; and

(iii) ensuring high standards of financial, statutory and operational accountability;

(c) receive summary reports on internal and external reviews, and monitor compliance with recommendations of those reviews;

(d) (i) receive and review the University's annual report including the financial statements and performance indicators and recommend its adoption by the Senate;

(ii) receive other statutory annual reports from within the University;

(e) sample compliance with specific external or internal legislation or internal policy or review documents from time to time;

(f)(i) advise the Senate of its findings in relation to assessing the performance and objectivity of the internal audit function and regarding work undertaken under (a) to (e), whether satisfactory or unsatisfactory; and

(ii) if the findings are unsatisfactory, identify material matters arising and recommend to the Senate on the advice to be given to the Vice-Chancellor on action to be taken;

(g) bring to the Senate's attention emerging strategic issues related to the committee's role which have the potential to impact on the University and which the committee believes should be addressed by the Executive and/or the Senate; and

(h) undertake any other tasks referred to it by the Senate from time to time.

(2) The committee may forward for the consideration of the Senate proposals for the commissioning of research in areas relevant to its role, provided that any such proposals are accompanied by a clear rationale for the research proposed, and an estimate of costs.

(3) The committee has the detailed responsibilities as set out in Schedule 1.

Membership

3.(1) The committee comprises:

(a) at least two external members appointed by and from the Senate as follows:

(i) an external member as Chair;

(ii) at least one other external member;

(b) up to four external members co-opted by the foregoing.

(2) At the beginning of each year the committee must appoint from among its members a Deputy Chair.

(3) Except as set out in (4) an external member is one who does not hold any University position, either paid or honorary.

(4) For the purpose of membership of this committee, the Senate may, in exceptional circumstances, determine that a holder of a clinical, adjunct or honorary position is an external member but such a person may not usually hold the position of Chair or Deputy Chair.

(5) The following are standing invitees to meetings of the committee:

(a) the Chancellor;

(b) the Executive Director (Finance and Resources);

(c) the Internal Audit Manager; and

(d) a representative of the Office of the Auditor General.

Term of Office

4. The term of office of members is normally two years. 

Eligibility for a Second or Subsequent Term of Office

5. At the end of a term of office, members are eligible to be reappointed or co-opted again.

Skills and/or Qualifications of Members

6.(1) It is desirable that members appointed under 3(1)(a) have a strong financial or business background.

(2) In determining co-options under 3(1)(b), the committee—

(a) must ensure that co-options provide expertise in areas of need identified by the committee including in the education sector;

(b) must consider issues of confidentiality and loyalty; and

(c) must consider co-opting members of the alumni, potential future members of the Senate and former members of the Senate.

Quorum

7. The quorum for the committee is half the number of members and must include at least one of the members appointed under 3(1)(a).

Decisions

8.(1) All questions which come before the committee are decided by a majority of the members present and voting.

(2) The chair of the meeting has an ordinary vote and a casting vote.

Frequency of Meetings

9. The Committee normally meets four times a year.

 

 

SCHEDULE 1 DETAILED RESPONSIBILITIES OF THE AUDIT AND REVIEW COMMITTEE

Risk Identification, Management and Internal Controls

The committee identifies the major risks on which it reports and seeks from management advice on the mechanisms already in place and whether any additional mechanisms are needed.

In relation to the internal control and risk management systems, the committee's responsibilities include:

• ensuring the University maintains a current risk identification process and reporting mechanism;

• assessing the internal processes for managing key risk areas, including but not limited to—

        - litigation and claims;

        - non-compliance with laws and regulations, including environmental, occupational health and safety, industrial relations laws; and

        - business risks other than those dealt with by other Senate committees;

• addressing the adequacy of the control structure with management, internal committees associated with managing risk and the internal and external auditors;

• evaluating the process the University has in place for assessing and continuously improving internal controls, particularly those related to areas of significant risk;

• assessing whether management has controls in place for unusual types of events and/or any potential events that may carry more than an acceptable degree of risk;

• maintaining an overview of statements and opinions on procedures or practices expressed by such bodies at the Auditor-General, the Parliamentary Commissioner (Ombudsman), the Equal Opportunity Commissioner, Anti-Corruption Commissioner, Freedom of Information Commissioner, WorkSafe and the Department of Environmental protection, and advising the Senate accordingly;

• dealing with the major reviews initiated regularly by management and from time to time by external bodies where there are matters raised which warrant the committee's attention.

Financial Reporting, including Accounting Policies

The committee has a primary responsibility to ensure that the University's accounting policies and principles are in accordance with the financial reporting framework. The committee plays a major role in examining the accounting policies that are going to be applied throughout the year and will ultimately be applied in drawing up the year end financial statements.

In assessing changes to alternative accounting principles, the committee requests management to inform them—

• whether the methods chosen by management are consistent with the Financial Administration and Audit Act, Treasurer's Instructions, Accounting Standards, Accounting Concepts and Urgent Issues Group (UIG) Consensus Views;

• of the accounting principles typically used in the tertiary sector;

• of management's motivation for the change;

• of the current and future financial statement impact; and

• how the proposed changes are likely to be viewed by the external auditor and Government.

The committee assesses significant estimates and judgements in the financial reports by enquiring of management about the process used by management in making material accounting estimates and then enquiring of the external auditor the basis for the auditor's conclusions regarding the reasonableness of those estimates.

The committee also has responsibility to receive and review the University's Annual Report, including the Financial Statements and Performance Indicators, and to recommend its adoption by the Senate. The Committee also receives other statutory annual reports from within the University.

Internal and External Audits

The committee has a responsibility to consider carefully issues raised by the external and internal auditors as those issues may have implications on the University's control environment.

The following activities and practices are to be carried out by the committee:

• Communicate expectations to both the internal and external auditors.

• Monitor and assess the internal and external auditors' performance against expectations

• Support, yet question, the internal and external auditors.

• Understand and assess any auditor scope limitations and/or management's response.

• Hold regular meetings with the internal and external auditors.

• Co-ordinate the interaction between the internal and external auditors.

The committee is authorised and directed to carry out the following specific duties and responsibilities:

Internal Audit

• Review the annual internal audit plan, particularly concerning the overall control environment, irregularities and regulatory compliance, the scope of work and requirements for the Internal Auditors to carry out their audit functions. 

• Ensure that Internal Audit have sufficient resources to meet the requirements of the approved audit plan.

• Ensure the operations of the internal audit function are being maintained in an efficient and effective manner. 

• Review any non-auditing services to be performed by Internal Audit and the impact these may have on the role of independence.

• Review internal audit reports with particular concern for any weaknesses, qualifications of exceptions noted, and where required, management response to these.

• Monitor and analyse critically management's responsiveness to internal audit's findings and recommendations.

• Monitor progress of internal audit performance against the approved plan and budget.

• Assess the extent of reliance placed by external audit on internal audit work.

• In consultation with the Senior Deputy Vice-Chancellor, appoint and assess the performance of the Manager, Internal Audit.

External Audit

• Liaise with the external auditors regarding the scope and general extent of their annual audit plan.

• Review with the external auditors their findings and recommendations, including interim audit reports and management's responses and action to correct any noted deficiencies.

• Advise the Senate of any issues of concern arising from the external auditors' findings and recommendations, and the extent to which audit recommendations have been or are to be implemented.

• Review any other matters relevant to the audit of the University's accounts deemed necessary to ensure compliance with the applicable laws, regulations, standards and policies.

Relevance and Accuracy of Information Going to the Senate

The committee has a responsibility to monitor the relevance and accuracy of information going to the Senate. This will be undertaken whenever requested by the Senate. Where changes seem appropriate, the committee will communicate these to management.