Audit and Assurance Committee
Terms of Reference
April 2017
What / To provide assurance to the Board of Directors through the oversight, assessment, review and scrutiny of functions, process and systems within the Trust to maintain a sound system of internal control.
Who / The Committee shall be appointed by the Board from amongst the Non-Executive Directors (NEDs) of Trust and shall consist of not less than three NED members. One of the members will be appointed Chair of the Committee by the Board.
Attendees:
Only the members of the Committee have the right to attend meetings however, the following shall generally be invited to attend routine meetings:
  • The Director of Finance, Information & Strategy
  • Appropriate internal and external audit representation
  • Either the Medical Director or the Director of Quality/Chief Nurse
  • The Associate Director of Corporate Governance/Trust Secretary
A Local Counter Fraud Specialist will attendalternate meetings.
The Chief Executive will be invited, at least annually, to represent the process of assurance that supports the Annual Governance Statement.
Other directors will attend on a regular basis as determined by the committee.
As a general principle Executive Directors will be invited to attend when the Committee is discussing areas or risk relating to the Directors responsibilities and at the Committee’s discretion.
The Secretary of the Audit and Assurance Committee will also be in attendance to take minutes and provide appropriate support to the Chair and Committee members.
Governors will be invited to attend meetings.
Quoracy / The Audit and Assurance Committee will be quorate when two NED members are present.
The Audit and Assurance Committee can exercise the right to meet in private, which includes to exclusion of any or all of the above.
When / Five meetings per annum, more frequently if deemed necessary by the committee, however there must be a minimum of four.
Where / Committee meetings will be held at DCHS premises or via conference call.
Why / The Trust’s Constitution requires that the Trust establish a Committee of Non Executive Directors, excluding the Chairman, as an Audit and Assurance Committee. The Committee meets in private.
How / The role of the Committee is to:
  1. Review the establishment and maintenance of an effective system of integrated governance, risk management and internal control across the whole of the organisations activities that supports the achievement of the organisations objectives,being mindful of the wider system changes, and manages the key risks facing the Trust.
In particular, the committee shall review the adequacy and effectiveness of:
  • The underlying assurance processes that indicate the degree of achievement of corporate objectives, the effectiveness of the management of principal risks and the appropriateness of the above disclosure statements.
  • The policies for ensuring compliance with relevant regulatory, legal and code of conduct requirements and related reporting and self-certification.
  1. Monitor the integrity of the financial statements of the NHS foundation trust, and any formal announcements relating to the trust’s financial performance, reviewing significant financial reporting judgements contained in them
  1. Review and monitor the integrity of any statements that are risk and control related. These specifically include, but are not limited to, the Annual Governance Statement, the accompanying Head of Internal Audit Opinion, any external audit opinion and the financial statements of the Trust.
  1. Review the Trusts internal financial controls and review the systems and controls in place to manage risk.
  1. Review and make recommendations to the Trust Board onthe Trust’s Annual Report, Quality Accounts and Financial Statements
  1. Review any declarations for CQC registration and the assurances required for the Board.
  1. Make recommendations to the Board of Directors, in relation to the appointment of the internal audit function, and to approve remuneration and terms of engagement.
  1. Monitor and review the effectiveness of the NHS foundation trust's internal audit function, taking into consideration relevant UK professional and regulatory requirements
  1. To report to the Council of Governors on the performance of the External Auditor and make a recommendation to the Council of Governors on the appointment, re-appointment or removal of the External Auditorand approve the remuneration and terms of engagement of the external auditor
  1. Review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements
  1. Review the findings of other significant assurance functions, both internal and external to the organisation, and consider the implications on governance of the Trust.
  1. Review and monitor and ensure that the organisation has adequate arrangements in place for both preventing and countering fraud and will review the outcomes of counter fraud reports.
  1. Consider and review all aspects of the Assurance Framework to ensure that the principles are embedded within the organisation.
  1. Review the assurances that the Trust has an effective control system in place for ensuring good quality data.
  1. Review the assurances that the Trust has an effective control system in place for the delivery of clinical audit.
  1. Review arrangements that allow staff of the NHS foundation trust and other individuals where relevant, to raise, in confidence, concerns about possible improprieties in matters of financial reporting and control, clinical quality, patient safety or other matters.
  1. Develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm;
  1. Report to the council of governors, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken.
  1. Consider and approve relevant policies, Financial Instructions and processes.
In carrying out this work the Committee will primarily utilise the work of internal audit, external audit and other assurance functions, but will not be limited to these sources. It will also seek reports and assurances from directors and managers as appropriate, concentrating on the over-arching systems of integrated governance, risk management and internal control, together with indicators for their effectiveness.
Sub Committees / The Committee has the right to request and receive reports or minutes from any other sub-committee or sub-group it feels maybe necessary and useful in discharging its duties.
Communication Links / The Committee will provide a report to the Board of Directors, at least annually, on its work and findings against the duties outlined above. In addition to the annual report, the Committee will also report quarterly (after every meeting) to the Board.
Reporting To / The Summary Report of the Audit and Assurance Committee shall be formally recorded and submitted to the Board of Directors. The Chair of the Committee shall bring to the attention of the Board any issues which require any executive action.
Key Performance Indicators /
  • Evidence of Compliance with Audit Committee Handbook requirements
  • True and Fair Annual Governance Statement
  • Green Governance Risk Rating
  • Production of Committee Annual Report to Board of Directors and Council of Governors of work of Committee

Other Information / 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. 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.
Review Date / April 2018