Department of Education and Training

Audit Committee Charter

AUDIT COMMITTEE

CHARTER

February 2008

1Authority

1.1Chief Executives are responsible for maintaining adequate internal controls under section 31 of the Australian Capital Territory Financial Management Act 1996. This includes the safeguarding of the assets of the Department, compliance with applicable legislation and the proper reporting of the financial results of the Department.

1.2The Chief Executive of the Department of Education and Training has established an Audit Committee to assist in fulfilling these responsibilities.

1.3The Chief Executive authorises the committee, within the scope of its role and responsibilities, to:

obtain any information it needs from any employee and/or external party (subject to their legal obligation to protect information)

discuss any matters with the external auditor, or other external parties (subject to confidentiality considerations)

request the attendance of any employee, including the Chief Executive, at committee meetings

obtain external legal or other professional advice, as considered necessary to meet its responsibilities, at the Department’s expense.

1.4The standards contained in the ACT Government Internal Audit Framework are adopted.

2Objective

2.1The objective of the committee is to provide independent assurance and assistance to the Chief Executive and Minister on the Department’s risk, control and compliance framework, and its external accountability responsibilities.

3Composition and tenure

3.1The committee will consist of at least three and not more than five members appointed by the Chief Executive. At least two members of the committee will be independent, one of which will be the Chair Person of the committee.

3.2The external members of the Audit Committee shall be persons that are not associated with any firm engaged to provide internal audit support on specific audit projects.

3.3The Minister will appoint the Chair and Deputy Chair of the committee on the Chief Executive’s recommendation.

3.4Members will be appointed for an initial period not exceeding three years after which they will be eligible for extension or re-appointment.

3.5The Chief Executive, Chief Finance Officer and the Chief Internal Auditor will not be members of the committee, but may attend meetings as observers.

3.6The members, taken collectively, will have a broad range of skills and experience relevant to the operations of the Department. At least one member of the committee should have accounting or related financial management experience with an understanding of accounting and auditing standards in a public sector environment.

4Roles and responsibilities

4.1The committee has no executive powers, except those expressly provided by the ACT Treasury or delegated to it by the Chief Executive.

4.2The committee is directly responsible and accountable to the Chief Executive for the exercise of its responsibilities. In carrying out its responsibilities, the committee must at all times recognise that primary responsibility for management of the Department rests with the Chief Executive.

4.3The Public Sector Management Standards require that the Chief Executive to appoint a Senior Executive Responsible for Business Integrity Risks (SERBIR). The SERBIR has ultimate responsibility for integrity matters, however the Committee should be kept informed and monitor matters relevant to its responsibilities.

4.4The responsibilities of the committee may be revised or expanded in consultation with, or as requested by, the Chief Executive from time to time.

5Risk management

5.1The Audit Committee is responsible for the oversight of the risk management function and for ensuring its effectiveness. The Manager, Risk Management and Audit facilitates risk management throughout the Department while risk management is to be carried out by each manager and each area as a core activity.

5.2 The oversight and guidance by the Audit Committee will be in accordance with ACT Treasury Internal Audit Framework.

5.3The committee’s responsibilities are to:

review whether management has in place a current and comprehensive risk management framework, and associated procedures for effective identification and management of the Department’s financial and business risks, including fraud

review whether a sound and effective approach has been followed in developing strategic risk management plans for major projects or undertakings

review the impact of the Department’s risk management framework on its control environment and insurance arrangements

review whether a sound and effective approach has been followed in establishing the Department’s business continuity planning arrangements, including whether disaster recovery plans have been tested periodically

6External accountability

6.1The committee’s responsibilities are to:

review the financial statements and provide advice to the Chief Executive (including whether appropriate action has been taken in response to audit recommendations and adjustments), and recommend their signing by the Chief Executive

satisfy itself that the financial statements are supported by appropriate management signoff on the statements and on the adequacy of the systems of internal controls

review the processes in place designed to ensure that financial information included in the Department’s annual report is consistent with the signed financial statements

satisfy itself that the Department has appropriate mechanisms in place to review and implement, where appropriate, relevant Parliamentary Committee reports and recommendations

satisfy itself that the Department has a performance management framework that is linked to organisational objectives and outcomes.

7.Integrity

Monitor compliance with ACT Government and best practice standards on integrity matters and review and monitor the implementation of recommendations contained in the Fraud and Corruption Prevention Plan.

The Audit Committee will review the Fraud and Corruption Prevention Plan and recommend the Plan for executive management approval.

The Audit Committee is to be advised of all fraud and corruption cases by the SERBIR.

Where the Audit Committee:

  • Considers that the department's procedures and practices relating to an area which impacts upon the integrity of the department are inadequate, and
  • In the view of the Committee, the inadequacies have not been effectively dealt with by the fraud and corruption prevention plan'

the Audit Committee is to undertake a review of those procedures and practices and report to the Chief Executive on steps necessary to remedy the shortcomings.

The Audit Committee may, after consultation with the Chief Executive, refer a matter relating to a serious breach of integrity to the ACT Ombudsmen if the Committee reaches the view that neither investigative action nor internal administrative action is likely to resolve the issue and if it is not a matter referred to in Section 6 of the Ombudsman Act 1989.

8Legislative compliance

8.1The committee’s responsibilities are to:

determine whether management has appropriately considered legal and compliance risks as part of the Department’s risk assessment and management arrangements; and

review the effectiveness of the system for monitoring the Department’s compliance with relevant laws, regulations and associated government policies.

9Internal audit

9.1The Audit Committee is responsible for the oversight of the internal audit function and

for ensuring its effectiveness.

9.2Such oversight and guidance will be in accordance with ACT Government standards.

9.3Ongoing oversight:

review and endorse the internal audit charter as required

consult concerning the hiring or termination of the Chief Internal Auditor

advise the Chief Executive on the adequacy of the performance evaluation and compensation decisions regarding the Chief Internal Auditor

seek assurances that the qualifications and skill sets of internal audit staff are commensurate with the strategic direction and operations of the department

monitor progress against the strategic and annual plan

review internal audit reports and monitor and critique management’s responses to findings and the extent to which recommendations are implemented.

9.4Annually

review the internal audit function’s performance

endorse or approve the internal audit strategic plan and the annual audit work plan

review the interrelationship of the work of the internal auditor and the external auditor and the scope for synergies and savings

take steps to confirm the independence of the internal audit function

ensure the internal auditor has unrestricted access to the Chief Executive.

9.5External audit

provide input and feedback on the financial statement and performance audit coverage proposed by external audit and provide feedback on the audit services provided

review all external plans and reports in respect of planned or completed audits and monitor management’s implementation of audit recommendations

provide advice to the Chief Executive on action taken on significant issues raised in relevant external audit reports and better practice guides.

10Responsibilities of members

10.1Members of the committee are expected to understand and observe the legal requirements of the Financial Management Act 1996. Members are also expected to:

contribute the time needed to study and understand the papers provided;

apply good analytical skills, objectivity and good judgment; and

express opinions frankly, ask questions that go to the fundamental core of the issue and pursue independent lines of enquiry.

11Reporting

11.1The Chair will report to the Minister annually on the committee’s operation and activities during the year. The report should include:

a summary of the work the committee performed to fully discharge its responsibilities during the preceding year

a summary of the Department’s progress in addressing the findings and recommendations made in internal, external and Parliamentary Committee reports

an overall assessment of the Department’s risk, control and compliance framework, including details of any significant emerging risks or legislative changes impacting on the Department

details of meetings, including the number of meetings held during the relevant period, and the number of meetings each member attended.

11.2The Chair of the Audit Committee will brief the Chief Executive on matters discussed by the Audit Committee at least every six months and on any other occasion where it is considered to be desirable.

11.3The committee may, at any time, report to the Chief Executive any other matter it deems of sufficient importance to do so. In addition, at any time an individual committee member may request a meeting with the Chief Executive.

11.4The Audit Committee will also report to the Chief Executive after each meeting on the following:

significant control weaknesses or breakdowns in critical controls

fraudulent or illegal activities

conflicts between ACT Auditor General and internal audit and management

recommendations to the executive to endorse the financial statements

any other matters of significance to the Department or key stakeholders.

12Meetings

12.1The committee will meet at least four times per year. A special meeting may be held to review the Department’s annual financial statements.

12.2The Chair is required to call a meeting if requested to do so by the Chief Executive, or another committee member.

12.3A forward schedule, including meeting dates and agenda items, will be prepared. The forward meeting will cover all of the Audit Committee’s responsibilities as detailed in this charter.

12.4A quorum will consist of a majority of committee members. Where there is more than one independent member on the committee, a quorum will include at least one independent member.

12.5Meetings can be held in person, by telephone or by video conference.

12.6The Chief Internal Auditor and external audit representatives will be invited to attend each meeting, unless requested not to do so by the Chair of the committee. The committee may also request the Chief Finance Officer or other employees attend committee meetings or participate for certain agenda items.

12.7The committee will meet separately with both the internal and external auditors at least once a year.

12.8The Chief Executive may be invited to attend committee meetings to participate in specific discussions or provide strategic briefings to the committee.

13Secretariat

13.1The Department’s Risk Management and Audit section will provide secretariat support for the committee. The secretariat will ensure the agenda for each meeting and supporting papers are circulated, after approval from the Chair, at least one week before the meeting, and ensure the minutes of the meetings are prepared and maintained. Minutes must be approved by the Chair and circulated within two weeks of the meeting to each member and committee observers, as appropriate.

14Conflicts of interest

14.1Once a year Audit Committee members will provide written declarations to the Chief Executive stating they do not have any conflicts of interest that would preclude them from being members of the committee.

14.2Audit Committee members must declare any conflicts of interest at the start of each meeting or before discussion of the relevant agenda item or topic. Details of any conflicts of interest should be appropriately minuted.

14.3Where members or observers at Audit Committee meetings are deemed to have a real, or perceived, conflict of interest it may be appropriate that they are excused from committee deliberations on the issue where a conflict of interest exists.

15Induction

15.1New members will receive relevant information and briefings on their appointment to assist them to meet their committee responsibilities.

16Assessment arrangements

16.1The Chair of the Audit Committee, in consultation with the Chief Executive, will initiate a review of the performance of the committee at least once every two years. The review will be conducted on a self-assessment basis (unless otherwise determined by the Chief Executive) with appropriate input sought from the Chief Executive, the internal and external auditors, management and any other relevant stakeholders, as determined by the Chief Executive.

17Review of charter

17.1The committee will review this charter at least once a year. This review will include consultation with the Chief Executive.

17.2Any substantive changes to the charter will be recommended by the committee and formally approved by the Chief Executive.

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