ACIAR AUDIT COMMITTEE TERMS OF REFERENCE
Preamble
In accordance with s47 of the Financial Management and Accountability Act 1997, the ACIAR Audit Committee is hereby established.
The Committee is established to create a primary forum within the Centre for communication between the Centre’s auditors (both internal and external) and management, directed to the good management of public resources, the enhancement of controls, improving the reliability of financial statements, and fostering increased accountability for the Centre’s operations.
Objectives
The overarching objective of the Committee is to assist the Director in fulfilling his responsibilities under the ACIAR Act and the FMA Act for managing the Centre’s affairs and staff in a manner that promotes efficient, effective and ethical use of the Commonwealth’s resources. Specifically, the Committee will:
- develop and advise the Director on a program of audits to manage risk;
- oversee and appraise the quality of the audits conducted both by the Centre’s internal auditors and the Australian National Audit Office (ANAO);
- ensure that recommendations of audits are acted upon or addressed to the satisfaction of the Director;
- maintain, by scheduling regular meetings, open lines of communication among management, the internal auditors and ANAO to exchange views and information, as well as to confirm their respective authority and responsibilities;
- serve as an independent and objective party to review the financial information presented by management at each year end;
- assist the Director in assessing and improving the adequacy of the Centre’s administrative, operating and accounting controls; and
- emphasise to staff the need for the effective control and good management of public resources.
Functions and Responsibilities
The functions and responsibilities of the Audit Committee are set out below.
Risk Management
- prepare and maintain a risk management (including fraud control) policy, plan and register (the policy and plan to be updated every two years; the register annually).
Internal Audit
- formulate and recommend to the Director a strategic (three-yearly) and annual program of internal audits to manage risk;
- approve strategic and annual audit plans for those operations of the Centre to be examined by the internal auditors and review progress against those plans;
- ensure that all of the Centre’s significant risk exposures which can benefit from auditing are considered when areas of audit are selected;
- review all audit reports, identify and disseminate good practices, monitor management’s responses and actions to correct noted deficiencies, and provide advice to the Director on action to be taken for all matters raised in a report;
- evaluate the overall effectiveness of the internal auditors including the extent of reliance on internal audit work by the Australian National Audit Office (ANAO);
- recommend to the Director the appointment of the internal auditors.
External Audit (ANAO)
- provide advice to the Director on action to be taken for all matters raised by the programs conducted by the ANAO;
- review all audit reports, monitor management’s responses and actions to correct noted deficiencies, and provide advice to the Director on action to be taken for all matters raised in a report or parliamentary comment;
- review the final draft of the annual financial statements and the audit report to ensure that the statements are prepared in accordance with the FMA Orders, before their submission to the Director for approval.
Coordination
- as far as practicable, ensure that the audit programs conducted by the internal auditors and the ANAO are coordinated;
- determine that no management restrictions are being placed upon either the internal or ANAO auditors.
Accounting Controls and Policies
- evaluate the adequacy and effectiveness of the Centre’s administrative, operating and accounting policies through active communication with Centre staff, internal audit and the ANAO;
- evaluate the adequacy of the Centre’s accounting control system by reviewing written reports from the internal auditors and the ANAO, and monitoring management’s responses and actions to correct noted deficiencies;
- require reports from management and the internal auditors on any significant proposed regulatory, accounting or reporting issue, to assess the potential impact upon the Centre’s financial reporting and administrative processes;
- review and approve all significant and accounting policy changes.
General
- take an active interest in ethical considerations regarding the Centre’s policies and practices;
- monitor the standard of corporate conduct in areas such as arms-length dealings and likely conflicts of interest;
- identify and direct any special projects or investigations deemed necessary;
- keep under review developments in the audit profession and standards issued by accountancy bodies and other regulatory authorities;
- review policies on sensitive issues;
- monitor policies in relation to privacy matters.
Reporting
- provide the Director with copies of all minutes of meetings and audit reports;
- prepare reports to the Director in the form required by him for his own purposes or for onward reporting to the Board; and
- refer written reports directly to the Board of Management as deemed necessary by the Committee.
Membership
The Committee will comprise at least three and not more than five members. One of the members will be appointed chair of the Committee.
Until further notice, the Committee members will be:
- Mr L Early, (Chair)
- Ms Linda Atkinson (External member)
- Dr S Hearn, Senior Advisor
- Dr J Davis, Research Program Manager, Policy Linkages and Impact Assessment
- Mr David Shearer, Research Program Manager, Agribusiness
Advisors are made up from:
- one to two representatives of the ANAO
- one to two representatives of the Internal Auditors
- the Finance Manager (ex officio)
The Secretary is Ms Anni Sugiono, Accountant (ex officio).
Meetings
The Committee will normally meet at least four times per year, plus any additional meetings the Chair decides are necessary for the Committee to fulfil its functions and responsibilities. In addition, the Chair is required to call a meeting of the Committee if requested to do so by a Committee member, the Director of ACIAR, or the internal or external auditors.
The Finance section will provide the Secretary of the Committee and will be responsible, in conjunction with the Chair, for drawing up the agenda and circulating it, supported by explanatory documentation to Committee members and to the Director.
The Secretary of the Committee will also be responsible for keeping the minutes of meetings of the Committee, and circulating them to Committee members and to the Director.
Relevant senior staff of Corporate Programs will attend meetings as and when required by the Chair, to provide assistance to the Committee.
Access
The Committee will have unlimited access to both the internal and ANAO auditors and will also have the ability to consult independent experts when considered necessary.
