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DEPARTMENT OF FINANCE AND ADMINISTRATION

By Phillip Roberts,2014-05-16 00:25
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DEPARTMENT OF FINANCE AND ADMINISTRATION

    General Synod Financial Advisory Group

    MODEL DIOCESAN AUDIT COMMITTEE CHARTER

    November 2002

PREAMBLE

1. The Audit Committee is a committee appointed by Bishop-in-Council to provide

    independent assurance on the appropriateness of a Diocese’s accountability and

    control framework, which, over time, is expected to enhance the quality and

    consistency of financial information provided to and issued by Bishop-in-Council.

2. The Audit Committee’s role is to review, monitor and, where necessary,

    recommend improvements in the following areas of responsibility for the Diocese

    as a whole and, as appropriate, diocesan organisations:

    i. Compliance with legal requirements and Diocesan policy relating to

    financial disclosure

    ii. The adequacy of internal controls and risk management procedures,

    including internal audit

    iii. The scope and performance of the External Auditor

    iv. Financial reporting to and by the Bishop-in-Council

    v. Other matters delegated by Bishop-in-Council from time to time.

3. The Audit Committee is asked to look at the “big picture” of the Diocese in

    undertaking its responsibilities, and is encouraged to think strategically.

4. It is recognised that an Audit Committee can be effective only when operating in a

    sound environment of financial administration, which inter alia will include a

    competent financial officer, an effective Diocesan finance committee and suitably

    experienced independent auditors who understand their role. Where this

    environment does not exist, the Audit Committee should encourage change

    towards best practices.

5. Each member of the Audit Committee should be capable of making a valuable

    contribution to the Committee. It is expected that each member will obtain an

    understanding of the detailed responsibilities of the Committee and of the

    operations and business-related risks of the Diocese and its organisations.

6. The Diocese will provide secretarial support to the Audit Committee, including

    when it is drawn from a Provincial panel.

7. It is acknowledged that the existence of an Audit Committee cannot eliminate the

    risk of fraud, defalcation or theft.

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AUTHORITY

8. Bishop-in-Council authorises the Audit Committee, within the scope of its

    responsibilities, to:

    i. Seek any information it requires from:

    a. any employee (and all employees are directed to co-operate with

    any request made by the Audit Committee); and

    b. external parties;

    ii. Obtain outside legal or other professional advice, subject to the appropriate

    delegations; and

    iii. Request the attendance of Diocesan officers at meetings as appropriate.

INDEPENDENCE

9. The Audit Committee has no executive powers in relation to the operations of a

    Diocese. It functions in an oversight and review role.

10. The primary responsibility for financial and other reporting, internal control and

    compliance with legislation, regulations and ethics within a Diocese rests with

    executive management.

11. The Audit Committee is directly accountable to Bishop-in-Council.

12. Members with real or perceived conflicts of interests will notify the Audit

    Committee as soon as these issues become apparent. Any member with an actual

    or perceived conflict of interest will absent themselves from discussions at the

    point of decision.

ORGANISATION

Membership

13. The Audit Committee will comprise no fewer than 3, and up to 5 members, all of

    whom will be non-executive members.

14. Bishop-in-Council will appoint the chair of the Audit Committee from time to

    time, and will be responsible for the selection and appointment of Audit

    Committee members.

15. At least one member will be a member of Bishop-in-Council.

16. None of: the Bishop; Vicar General; Bishop’s Registrar; Diocesan Business

    Manager; Diocesan Treasurer; Manager, Internal Audit; nor those in a similar

    position in Diocesan organisations will be members of the Audit Committee.

17. At least one member of the Audit Committee will have expertise in or appropriate

    experience with financial reporting and auditing.

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    18. At least one member will have knowledge of the legal framework of the Anglican

    Church of Australia, in particular the Diocese and its organisations.

    19. A quorum for any meeting will be two-thirds of the members.

    20. The Diocese will provide a suitable secretary to the Audit Committee.

Attendance at Meetings

    21. The Audit Committee may invite such other persons to its meeting, as it deems

    necessary; however, Audit Committee members should not have a substitute

    representative attend on their behalf.

    22. The Manager, Internal Audit and the External Auditor should be invited to make

    presentations to the Audit Committee as necessary.

    23. Meetings shall be held not less than 3 times a year. Special meetings may be

    convened as required. Internal Audit or the External Auditor may request a

    meeting if they consider that it is necessary.

    24. The secretary of the Audit Committee shall ensure that an agenda is circulated at

    least 3 working days prior to the meeting together with any supporting papers.

    The secretary of the Audit Committee will ensure that a record of meetings is

    maintained and, after approval of the Chairman of the Audit Committee, is

    circulated promptly to members, Bishop-in Council, the External Auditor, Internal

    Audit, and relevant Diocesan organisations as appropriate.

ROLES AND RESPONSIBILITIES

The Audit Committee will in regard to:

Internal Control

    25. Evaluate whether management is providing the appropriate environment by

    communicating the importance of internal control, and management of risk,

    including fraud risk, and ensuring that all employees have an understanding of

    their roles and responsibilities. This includes the evaluation of controls over the

    engagement and conduct of external parties including contractors, advisers and

    outsourcing arrangements.

    26. Consider how management assesses the adequacy of internal control processes

    and systems and plans for business continuity and actively participate in the

    assessment process from an independent perspective.

    27. Follow-up whether internal control recommendations made by Internal Audit and

    the External Auditor have been implemented by management.

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Financial Reporting

General

28. Satisfy itself, in consultation with Internal Audit and the External Auditor, that

    management is effectively managing the current areas of greatest financial and

    business risk.

29. Consider referring to Internal Audit and the External Auditor any fraud, illegal

    acts, deficiencies in internal control or other similar issues.

30. Review significant accounting and reporting issues, including recent professional

    and regulatory pronouncements, and understand their impact on the financial

    statements.

31. Review any legal matters that could significantly impact the financial statements.

Annual Financial Statements

    32. Review the annual financial statements and determine whether they are complete

    and consistent with the information known to Audit Committee members; assess

    whether the financial statements reflect appropriate accounting principles, and the

    disclosure of appropriate financial performance measures.

    33. Pay particular attention to complex and/or unusual transactions

    34. Focus on judgmental areas, for example those involving valuation of assets and

    liabilities; guarantees; environmental liabilities; litigation reserves; and other

    commitments and contingencies.

    35. Meet with management and the External Auditor to review the financial

    statements and the results of the audit.

    36. Review the annual report before its release and consider whether the information

    is reasonably consistent with the Audit Committee’s knowledge about the Diocese

    and its operations.

Internal Audit (if any)

    37. Review and endorse the plans, activities and organisational structure of the

    Internal Audit function and ensure no unjustified restrictions or limitations are

    made.

    38. Review the qualifications of Internal Audit personnel and concur with the

    appointment, replacement, reassignment or dismissal of the Internal Audit

    Manager.

    39. Review and endorse the performance agreement of the Internal Audit Manager

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    40. Review the effectiveness of the Internal Audit function and provide feedback on

    the performance of the Internal Audit Manager, both to the Internal Audit

    Manager and to Bishop-in-Council.

    41. Meet separately with the Internal Audit Manager to discuss any matters that the

    Audit Committee or Internal Audit believes should be discussed privately.

    42. Ensure that significant findings and recommendations made by Internal Audit are

    received and discussed by the Audit Committee on a timely basis.

    43. Ensure that management responds to recommendations by Internal Audit.

External Audit

44. Review the External Auditor’s proposed audit scope and approach and ensure no

    unjustified restrictions or limitations have been placed on the scope.

    45. Review the performance of the External Auditor in its dealings with the Diocese.

    46. Monitor the independence of the External Auditor, including the review and

    approval in advance of any non-audit services to be contracted by the Diocese

    from the External Auditor.

    47. Make recommendations to Bishop-in-Council regarding the appointment and

    reappointment of the External Auditor.

    48. Meet separately with the External Auditor to discuss any matters that the Audit

    Committee or auditors believe should be discussed privately.

    49. Ensure that significant findings and recommendations made by the External

    Auditor are received and discussed on a timely basis.

    50. Ensure that management responds to recommendations made by the External

    Auditor.

Compliance with Legislation and Regulations

    51. Review the effectiveness of the system for monitoring compliance with legislation

    and regulations and the results of management’s investigation and follow-up

    (including disciplinary action) of any fraudulent acts or non-compliance.

    52. Obtain regular updates from management, with legal advice as necessary,

    regarding compliance matters.

    53. Be satisfied that all regulatory compliance matters have been considered in the

    preparation of the financial statements and annual report.

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Reporting Responsibilities

54. Regularly report to the Bishop-in-Council on Audit Committee activities and

    make appropriate recommendations.

55. Ensure that Bishop-in-Council is aware of matters that may significantly impact

    the financial condition or affairs of the Diocese.

56. Provide an open avenue of communication between Bishop-in-Council, Diocesan

    senior executive staff, Internal Audit, and the External Auditor (including through,

    but not limited to, regular de-briefs of Audit Committee activity with the Bishop,

    occasional presentations by the Audit Committee to Bishop-in-Council, and a

    standing invitation to the External Auditor to attend Audit Committee meetings).

57. Evaluate the Audit Committee’s own performance on a regular basis and report to

    Bishop-in-Council at least annually on the Audit Committee’s achievements

    against its proposed outcomes.

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