Audit and Governance Committee
Membership of the Audit and Governance Committee
Chair - Mr. S. Kaliraj
Independant Committee members - Mr. C. Crosdale, Mrs. M. Corneby, Ms S Asar Paul
In attendance - Director of Finance, Chief Internal Auditor, a representative from External Audit
Terms of Reference
1. Constitution
The Trust Board hereby resolves to establish a formal sub-Committee of the Board to be known as the Audit and Governance Committee.
2. Membership
2.1 The Committee shall be appointed by the Board from amongst its nonexecutive members and shall consist of not less than three members. A quorum shall be two members. The Chairman of the Committee shall be appointed from among the non-Executives by the Trust Board.
3. Role of the Committee
3.1 The Trust Board has responsibility for ensuring effective governance arrangements are in place within a regime that supports the Board’s ability to sign-off the required Statement on Internal Control for each financial year. This ability is based on Board level confidence that risks facing the PCT are being managed appropriately by the various control mechanisms within the organisation.
3.2 The Trust Board has responsibility for ensuring effective internal control through the establishment and maintenance of a system of internal control designed to give reasonable assurance that assets are safeguarded, waste or inefficiency avoided, reliable financial and performance information produced and best value for money sought.
3.3 The Audit and Governance Committee provides the Trust Board with the means to undertake objective and independent reviews and to take specific responsibility in the following categories.
- Financial performance and financial health this includes meeting statutory financial targets, using resources effectively, and assessing the medium and long-term financial strategy of the PCT.
- Financial control - avoiding error or misappropriation.
- Financial Probity - compliance with SO/SFIs/Scheme of Delegation.
- General probity - openness, Code of Conduct and Accountability.
- Corporate governance - acting legally, meeting statutory obligations.
- Performance management and improvement, and Business Planning.
Attendance at meetings
4.1 The Director of Finance, MD of the PCT, Chief Internal Auditor, and a representative of the External Auditors, shall normally attend meetings. All Trust Board members shall have the right of attendance or may be called to attend as appropriate. The Committee will as part of alternate meetings meet with the External and Internal Auditors without any executive directors.
5. Frequency of meetings
Meetings shall be held not less than four times a year. The External Auditors or Chief Internal Auditor may request a meeting if they consider that one is necessary.
6. Authority
6.1 The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
6.2 The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
7. Duties
The duties of the Committee are as follows:
7.1 Internal Control and Risk Management
The Committee shall review the establishment and maintenance of an effective system of internal control and risk management.
In particular, the Committee will review the adequacy of:
- All risk and control related disclosure statements, together with any accompanying Heads of Internal Audit statement, prior to endorsement by the Board.
- The structures, processes and responsibilities for identifying and managing key risks facing the organisation.
- The policies for ensuring that there is compliance with relevant regulatory, legal and code of conduct requirements as set out in the Controls Assurance Standards and other relevant guidance.
- The operational effectiveness of policies and procedures.
- The policies and procedures for all work related to fraud and corruption as set out in Secretary of State Directions and as required by the Directorate of Counter Fraud Services.
7.2 Internal Audit
- To consider the appointment of the internal audit service, the audit fee and any questions of resignation and dismissal.
- To review the internal audit programme, consider the major findings of internal audit investigations (and management’s response) and ensure co-ordination between the Internal and External Auditors.
- To ensure that the Internal Audit function is adequately resourced and has appropriate standing within the organisation.
7.3 External Audit
- Consider the appointment of the External Audit, as far as the Audit Commission’s rules permit and agree the fees for the work undertaken.
- Discuss with the External Auditor, before the audit commences, the nature and scope of the audit, and ensure co-ordination, as appropriate, with other External Auditors in the local health economy.
- Review External Audit reports, including value for money reports and management letters, together with the management response.
7.4 Other External Bodies
The Committee shall consider the content of any report involving the Trust issued by the Public Accounts Committee, the Comptroller and Auditor General, the Audit Commission or the Commission for Health Audit and Inspection (the Healthcare Commission) and review management’s proposed response before presentation to the Board.
7.5 Financial Reporting
Review the annual financial statements before submission to the Board, focusing particularly on:
- Changes in, and compliance with, accounting policies and practices.
- Major judgemental areas.
- Significant adjustments resulting from the audit.
Standing Orders & Standing Financial Instructions & Financial Statements
The Committee shall keep under review the consistency of accounting policies both in a year to year basis and across the Trust, having due regard to the appropriate requirements.
The Committee shall review proposed changes to Standing Orders and Standing Financial Instructions and commend them or otherwise to the Board.
The Committee shall review requests for the waiver of Standing Orders and examine each circumstance of where waivers are not approved.
The Committee shall review schedules of losses and compensations and make recommendations to the Board, as appropriate.
7.6 Counter Fraud
The Committee shall receive and approve the Annual Plan on countering fraud.
The Committee shall receive an Annual Report from the Local Counter Fraud Specialist and a regular performance report at each meeting.
7.7 Governance
7.8.1 The Committee shall review the overall governance arrangements within the PCT, assessing the adequacy through the completion of the Controls Assurance self-assessment on Governance, on as annual basis.
7.8.2 Where the Audit and Governance Committee considers there is evidence of ultra vires transactions, evidence of improper acts, or if there are other important matters that the committee wish to raise, the Chairman of the Committee should raise these at a full meeting of the Trust Board.
7.8.3 The Committee shall review the overall assurance framework in terms of its adequacy and effectiveness.
7.8.4 The Committee shall review the compliance with the NHS Code of Conduct and Accountability within the PCT.
7.9 Performance Management and Business Planning
The Committee shall approve the framework for performance management within the PCT and the Board performance reports in terms of content, scope and format, in accordance with recommended best practice.
The Committee shall monitor achievement against the PCTs corporate objectives as detailed in the Business Plan.
8. Minutes
8.1 The minutes of Audit and Governance Committee and Governance shall be formally recorded and submitted to the Black Country Cluster Audit Committee for approval.
8.2 A report of the proceedings of the Quality and Safety Committee shall be received by the Audit and Governance Committee.
8.3 The Secretary to the Committee shall be the Secretary to the Trust Board.
Page last updated: 19 January 2012
