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CHARTER CITY OF UNLEY AUDIT COMMITTEE 1. Objective The objective ...
CHARTER CITY OF UNLEY AUDIT COMMITTEE 1. Objective The objective of the Audit Committee is to oversee the City’s risk management, and audit initiatives and to act as a source of advice to the Council and CEO in relation to these matters. This Charter is to be read in conjunction with the Committee’s Terms of Reference and with Chapter 8 of the Local Government Act 1999 and the City’s Risk Management Policy and Procedures. 2. Authority The Committee is appointed by the Council as a Committee and has the authority to require any information it sees as relevant to its activities from any Councillor, executive, staff member, contractor or consultant, each of whom are required to respond to such enquiries. The Committee is authorised to obtain independent professional advice where considered necessary following consultation with the CEO. 3. Responsibilities of the Committee The responsibilities of the Committee are to: In General • Examine any matters referred to the Committee and cause the undertaking of any other investigations considered appropriate. • To develop a program of audits to ensure the active management of risk and to demonstrate transparency and financial prudence • Receive Internal and Annual External Audit reports and monitor the implementation of corrective actions. • Support the development and promulgation of policies related to relevant legislation in particular the Whistleblowers Protection Act. In regard to External Audit • Support and provide advice to the Council in the appointment, evaluation and removal of the External Auditor. • Consider the coordination of any audit activities undertaken in order to ensure maximum coverage of review and avoid duplication. • Review audit results and managements’ response to external audit reports. • Ensure that the External Audit concerns itself with the matters contained within part 3 and part 4 of Chapter 8 of the Local Page 1 of 4 Charter – Audit Committee Government Act. • Be satisfied with the independence, scope and effectiveness of the external audit. • Ensure that the Auditor is provided with open and transparent access to officers, Councillors and information so as to enable the auditor to effectively conduct the task consistent with Chapter 8 of the Local Government Act. In regard to Internal Audit (Efficiency and Effectiveness Audits) • Support and provide advice in the appointment, evaluation and removal of the Internal Auditor or independent, suitably qualified person to undertake Efficiency and Effectiveness Audits. • Ensure that Internal Audits shall operate at a strategic level and concern themselves with the extent to which policy objectives have been satisfied, that is how effective the policy has been and how efficiently it has been implemented. • Discuss and approve the Internal Audit Plan and consider resourcing regarding the staffing and budget requirements. • Consider the coordination of the internal and external audit programs. The purpose of coordinating these efforts is to assure efficiency, reduce redundancy and use audit resources effectively. • Receive internal audit reports, consider recommendations and monitor the implementation of agreed corrective actions. • Be satisfied that the City has appropriate fraud and corruption prevention strategies and adequate processes are in place to identify and address any fraudulent or corrupt activities. • Be satisfied with the independence, scope and effectiveness of internal audit and persons undertaking such work. • Authorise special investigations (eg. fraud, misconduct and maladministration). In regard to Risk Management • Be satisfied that the City’s Risk Management Policy and Procedures are being applied, monitor the City’s risk profile including establishing and maintaining a register of key risks, tolerance levels and mitigation strategies. • Assess management systems and policies that deal with the adequacy and effectiveness of risk management and internal control practices. • Be aware of actual/proposed changes in the City’s operating environment and the potential impact they may have on the City’s risk profile. • Monitor the City’s ethical environment and the appropriateness of the Code of Conduct, policies and operational practices. • Be aware of the City’s Risk Register and that adequate actions are in place to mitigate risk to a tolerance acceptable to the City. Page 2 of 4 Charter – Audit Committee 4. Appointment and Removal of the City’s External Auditor Council appoints the External Auditor for up to a five year term under the provisions of the Local Government Act 1999. The Audit Committee will provide advice to Council for its consideration in relation to the appointment and removal of the External Auditor. The role of the External Auditor is to audit the City’s financial statements and provide an opinion on their accuracy, compliance with accounting standards and to note any particular matters arising from the audit. 5. Appointment and Removal of the City’s Internal Auditor The Internal Auditor or independent, suitably qualified person, which may be a person or firm appointed for a fixed term (maximum 5 years) or whom may be engaged per commission / assignment. Authority to appoint rests with the Audit Committee under delegation within the confines of the allocated budget. The Audit Committee make recommendations to Council in regard to the conduct of any investigation audit to be undertaken. The Audit Committee make recommendations to Council in regard to any need to remove the Internal Auditor from a commission or assignment. The role of the Internal Auditor shall be separate from that of the External Auditor to as far as possible, maintain independence. 6. Membership The Committee will comprise two appointments of the Council and three independent positions. One of the independent positions shall be appointed by Council as the Chair for the Committee. A deputy chair shall be appointed from one of the other four members. Only members of the committee are entitled to vote in committee meetings. Unless otherwise required by the Act not to vote, each member must vote on every matter that is before the committee for decision. Executives and senior managers as relevant shall attend Committee meetings as observers and/or be responsible for preparing papers for the Committee. In considering appointments to the Committee it is highly desirable that Committee members possess the following qualities between them: • Financial reporting/auditing background • Risk Management • Governance Page 3 of 4 Charter – Audit Committee • Inquisitiveness • Knowledge of Council business and/or public sector administration. Committee members are to declare any interests in accordance with the declaration of interest clauses within the Local Government Act 1999. Independence means not a supplier/receiver of goods and services to/from the City or its related bodies, either personally, or by direct relatives or entities which members own or have a controlling interest in. Non-compliance with these independence standards must be brought to the attention of the Committee at the time of nomination to the Committee and as they occur once a Committee Member. 7. Quorum A quorum for the Committee consists of at least 50% of the number of committee members (ignoring any fraction) plus one. Meetings are to be rescheduled if there is no quorum. 8. Secretarial and Meeting Procedure Secretarial services will be provided by the Council. Meetings shall be held in accordance with meeting and confidentiality provisions of the Local Government Act as appropriate. 9. Meetings The Committee will meet up to four times a year at appropriate times in the reporting and audit cycle and otherwise as required. One of the meetings will be a workshop forum to discuss the Cities risk profile and develop the External and Internal audit plans. The Chairperson is to call a Committee meeting if requested by any Committee Member or either of the Auditors. 10. Self Assessment The Committee shall conduct a self assessment to determine its effectiveness every 12 months, and report the outcome to Council. The CEO is to assist the Committee such that it may perform the review. This Charter is to be reviewed as part of the self-assessment procedure, and approved by Council. Page 4 of 4 Charter – Audit Committee
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