1
Audit Committee
Composition:
Seven Councillors in political balance. Chair appointed by Council
annually.
The Chair and Vice Chair must not be a member of the Cabinet or an
Overview and Scrutiny Committee.
The Committee has the right of access to all the information it
considers necessary in connection with the work of the Committee
and may consult directly with Internal and External
Auditors.
Governance
6.1 The terms of
reference should set out the committee’s position in the
governance structure of the authority.
Statement of Purpose
6.2 The audit committee
is a key component of Lancaster City Council’s corporate
governance. The committee’s purpose is to provide independent
high-level focus on the adequacy of governance, risks and control arrangements. Its role in ensuring
there is sufficient assurance over governance, risk and control
gives greater confidence to all those charged with governance that
those arrangements are effective.
6.3
It oversees internal and external audit, together
with the financial and governance reports, helping to ensure that
there are adequate arrangements in place for both internal
challenge and public accountability.
Core Functions
Governance, Risk and
control
6.4 To review the
council’s corporate governance arrangements against the good
governance framework, including the ethical framework and consider
the local code of governance.
6.5 To review the Annual
Governance Statement (AGS) and consider whether it properly reflects the risk environment and
supporting assurances, taking into
account the head of audit’s annual audit
opinion.
6.6 To consider whether
the annual evaluation for the annual governance statement fairly
concludes that governance arrangements are fit for purpose,
supporting achievement of the authority’s
objectives.
6.7 To consider the
reports on the effectiveness of internal controls and monitor the
implementation of agreed actions.
6.8 To consider the
reports on the effectiveness of the financial management
arrangements, including compliance with CIPFA’s Financial
Management Code.
6.9 To consider the
council’s arrangements to secure value for money and review
assurances and assessment on the effectiveness of these
arrangements.
6.10 To monitor the effective
development and operation of risk management in the council and
monitor progress in addressing risk-related issues reported
to the committee.
6.11
To monitor counter fraud, actions and resources and review the
assessment of fraud risks and potential harm to the council from
fraud and corruption.
6.12
To monitor the counter fraud strategy, actions and resources.
6.13
To review the governance and assurance arrangements for significant
partnerships or collaborations.
Arrangements for audit and assurance
6.14
To consider the Councils framework of assurance and ensure that it
adequately addresses the risks and priorities of the Council
Internal Audit
6.15
To approve the internal audit charter.
6.16
To review proposals made in relation the appointment of external
providers of internal audit services and to make recommendations on
their effectiveness.
6.17
To approve the risk-based internal audit plan, including resource
requirements and the approach to using other sources of assurances
and any work required to place reliance upon those other
sources.
6.18
To make appropriate enquiries of both management and internal audit
to determine if there are any inappropriate scope or resource
limitations.
6.19
To consider any impairments to the independence or objectivity of
internal auditarising from additional roles or responsibilities
outside of internal auditing and to approve and periodically review
safeguards to limit such impairments.
6.20
To approve significant interim changes to the risk-based audit plan
and resource requirements.
6.21
To consider reports from internal audit on the performance during
the year, including the performance of external providers of
internal audit services These will include:
·
Updates on the work of internal audit, including key
findings, issues of concern and action in hand as a result of internal audit work.
·
Regular reports on the results of Quality Assurance
Improvement Programme (QAIP)
·
Reports on instances where the internal audit
function does not conform with Public Sector Internal Audit
Standards (PSIAS) and Local Government Application Note (LGAN),
considering whether the non-conformance is significant enough that
it must be included in the AGS
6.22
To consider the head of internal audit’s annual report
including
·
The statement of the level of conformance with the
PSIAS and LGAN and the results of the QAIP that support the
statement(these will indicate the
reliability of the conclusions of internal audit)
·
The opinion on the overall adequacy and
effectiveness of the Council’s framework of governance, risk
management and control, together with the summary of the work
supporting the opinion (these will assist the committee in
reviewing the AGS)
6.23
To consider summaries of specific internal audit reports as
requested.
6.24
To receive reports outlining action taken where internal audit has
concluded that management has accepted a level of risk that may be
unacceptable to the authority or there are any concerns about
progress with the implementation of agreed actions.
6.25 To
contribute to
the QAIP and in particular the external quality assessment
of internal audit that takes place at least once every five
years.
6.26
To consider a report on the effectiveness of internal audit to
support the AGS where required to do so by the accounts and audit
regulations.
6.27
To provide free and unfettered access to the audit committee chair
for the head of internal audit, including the opportunity for a
private meeting with the committee.
External Audit
6.28
To support the independence of External Audit through consideration
of any External Auditor’s annual assessment of its
independence and review of any issues raised by PSAA or the
authority’s auditor panne; as appropriate.
6.29
To receive and comment upon the scope and depth of the External
Auditor work, considering the scope and depth of external audit
work and to ensure it gives value for money.
6.30
To monitor the External Auditor’s progress with the Annual
Plan.
6.31
To consider the external auditors’ annual letter, relevant
reports and the report to those charged
with governance.
6.32
To consider specific reports as agreed with the external
auditor.
6.33
To advise and recommend on the effectiveness of relationships
between internal and external audit and other inspection agencies
or relevant bodies.
6.34
To provide free and unfettered access to the audit committee chair
for the external auditors, including the opportunity for a private
meeting with the committee.
6.35
To consider periodically whether the Auditors appointed to carry
out the External Audit function remain independent and objective
and, that their judgement in carrying out that role has not been
impaired as a consequence of their
participation in any non-audit reviews, services or advice provided
to the Council.
6.36
To consider additional commissions of work from external
audit.
Financial Reporting
6.37
To monitor the arrangements and preparations for financial
reporting to ensure that statutory requirements and professional
standards can be met.
6.38
To review the annual Statement of Accounts on behalf of full
Council in accordance with the relevant Accounts and Audit
Regulations 2022 Specifically to consider whether appropriate
accounting policies have been followed and whether there are
concerns arising from the financial statements or from the audit
that need to be brought to the attention of the Council.
6.39
To consider the external auditor’s report to those charged
with governance on issues arising from the audit of the
accounts.
6.40
To consider and endorse amendments to the Council’s Financial
Regulations and Contract Procedure Rules and, on behalf of full
Council, give any instructions to the Section 151 Officer as may be
appropriate.
Accountability Arrangements
6.41
To report to those charged with governance on the committee’s
findings, conclusions and recommendations concerning the adequacy
and effectiveness of their governance, risk management and internal
control frameworks, financial reporting arrangements and internal
and external audit functions.
To prepare an annual report to full Council setting
out the committee’s work and performance during the year in
relation to the terms of reference and to refer to Council and the
effectiveness of the committee in meeting its purpose.
6.42
To publish an annual report on the work of the committee, including
a conclusion on the compliance with the CIPFA Position
Statement.
To review any issue referred to it by the Chief
Executive or any Council body.
Other core functions
6.43
To consider any matters referred to it by the Monitoring Officer in
accordance with Overview and Scrutiny Procedure Rule 12.
6.44
With the Monitoring Officer to monitor and review the operation of
the Constitution to ensure the aims and principles of the
Constitution are given full effect.
6.45
To undertake the annual review of the council’s use of the
Regulation of Investigatory Powers Act 2000 (RIPA), ensuring
compliance with the Code of Practice
6.46
With the exception of those parts of the Constitution, which are
assigned specifically to the Council Business Committee, to
consider and propose to Council any other amendments to the
Constitution as necessary.