Group Audit & Risk Committee Terms of Reference

Purpose

  • The purpose of the Group Audit & Risk Committee is to support the Muir Group Board and any Subsidiary Board by:
    • Overseeing all matters relating to external and internal audit.
    • Establishing a framework for the identification and management of risk and effective internal controls.
    • Establishing a framework for the management of health & safety and effectively monitoring performance
    • Scrutinising and advising on value for money.
    • Providing an added level of scrutiny in the monitoring of fraud prevention and detection.
    • Approving any policies delegated within the committee’s terms of reference.
    • Providing regular assurance to the boards on the committee’s work and its scrutiny of delegated responsibilities.

Membership

  • The Group Committee will consist of at least three, but no more than six, Board Members or Co-optees.
  • The Muir Group Board may co-opt skilled individuals who are not Board Members but Board Members will always form the majority of the Group Committee’s Membership. The Muir Group Board will select and review the membership on a regular basis ensuring it possesses the skills, knowledge and experience required.
  • The Group Audit & Risk Committee Chair will be appointed by the Muir Group Board taking into account the skills and competencies required for the position. The Muir Group Chair will not be a voting member of the Group Audit & Risk Committee and will not be the Group Audit & Risk Committee Chair. A Subsidiary Company Chair may be a voting member of the Group Audit & Risk Committee but will not be the Group Audit & Risk Committee Chair. The Chief Executive (as a Board Member) will not be a member of the Group Committee.

Quorum

  • The quorum for meetings is three Committee Members present (at least two must be Board Members).
  • Should a duly convened meeting not be quorate, any decisions required will be ratified by the Muir Group Board at the next available meeting.  If the decision is urgent then the provisions of the Urgent & Efficient Decision-Making Policy should be used.

Meetings

  • The principal arrangements for meetings of the Group Committee are as follows:
    • The Group Committee will normally meet four times a year. An urgent meeting may be called by any Committee Member, the Chief Executive or Secretary or at the request of the internal or external auditors.  In the case of urgent meetings, at least 24-hours’ notice will be given as to the purpose/content of the meeting.
    • The Group Committee Chair will control and agree attendance at meetings. Attendees will usually include the Executive Director of Resources and a representative of the internal audit function.
    • The Group Committee reserves the right to meet with the internal and external auditors or any other advisors without any employees present and should exercise that right at least once a year.
    • Minutes of meetings will be made available to all Board Members across the Group.

Committee responsibilities

  • In relation to external audit & statutory accounting the Group Committee’s responsibilities include:
    • Overseeing a regular process of review and renewal of the external audit contract.
    • Agreeing the fee to be paid (within budget) to the external auditor.
    • Recommending the appointment of external auditors to the Muir Group Board.
    • Agreeing the external audit plan each year; discussing and monitoring the planned programme of work, and receiving the reports of the external auditor.
    • Reviewing the external auditor’s independence and objectivity and annually appraising the effectiveness and value for money of the service.
    • Considering the draft annual financial statements for the Group and undertaking such detailed discussion as may be necessary with the external auditors and the Group Executive.
    • Obtaining assurance that external audit recommendations are implemented as timetabled.
  • In relation to internal controls the Group Committee’s responsibilities include:
    • Ensuring that policies and procedures are in place across the Group, and there is an appropriate culture of internal control, to ensure management of risk, value for money, propriety, regularity, economy, efficiency, competence and accountability.
    • Monitoring the correction of weaknesses in control within the Group.
    • Reviewing the annual reports of the Group Executive on internal controls assurance for the Group.
    • Reviewing annually the Group’s financial regulations.
  • In relation to internal audit the Group Committee’s responsibilities include:
    • Ensuring that there are appropriate internal audit arrangements in place for the Group.
    • Overseeing a regular process of review and renewal of the internal audit contract.
    • Recommending a suitable internal auditor appointment to the Muir Group Board.
    • Agreeing the fees (within budget) to be paid to the internal auditors.
    • Agreeing the annual programme and the scope of internal audits for the Group.
    • Receiving internal audit reports in full where they identify matters of low or no assurance in relation to the control environment or the effectiveness of control.
    • Receiving summaries and management action plans for all other internal audit reports.
    • Monitoring the completion of management actions.
    • Reviewing the annual reports of the internal auditors on the Group.
    • Regularly appraising the effectiveness of the approach, nature and scope of internal audit activities and compliance with professional standards and best practice.
  • In relation to risk the Group Committee’s responsibilities include:
    • Developing and recommending to the Muir Group Board a Group-wide framework for the identification and management of risk.
    • Overseeing the process for the production and review of risk maps and conducting regular reviews of all strategic risks and all high operational level risks.
    • Advising the Muir Group Board of any significant change in the risk profile of the Group’s business activities.
    • Carrying out stress testing of individual risks and combinations of risks within alternative scenarios.
    • Seeking assurance that risk management is embedded in the culture of the Group.
    • Ensuring that appropriate disaster recovery and contingency plans are in place and tested regularly.
    • Ensuring that the Group’s assets are protected including the maintenance of adequate insurance cover.
  • In relation to fraud, bribery & whistle blowing the Group Committee’s responsibilities include:
    • Receiving reports on all cases of fraud, attempted fraud or other irregularities, (including any whistle blowing) and considering whether appropriate action has been taken and that internal controls are satisfactory.
    • Ensuring that a fraud register is maintained and reviewed; and that the impact of alleged or fraudulent activity on internal controls is properly assessed.
    • Notifying the Muir Group Board (and any Subsidiary Board as appropriate) of any material incidence of fraudulent activity and the regulator in line with regulatory guidance.
    • Reviewing the Group’s systems and controls for the prevention of bribery and money-laundering.
    • Reviewing the adequacy and security of whistle blowing arrangements ensuring they allow proportionate and independent investigation and appropriate follow up action.
  • In relation to authority & access the Group Committee’s authority includes:
    • Initiating reports and investigations on any activity as it sees fit, having the right of access to all minutes, books, documents or any other information maintained by the Group; requiring employees to supply such information, either written or verbal, on any matter relating to operational or financial management.
    • Obtaining, if necessary, external legal or other independent professional advice (and the budget to do so) to enable it to properly conduct its business.
    • The right to report direct to the internal or external auditors and/or regulators, having first raised the committee’s concerns and intentions with the Muir Group Board and the any relevant Subsidiary Board if appropriate.
    • The right to ensure direct access to the committee by all persons appointed to carry out internal audits or investigations of possible or actual fraud, and the Group’s external auditors.
  • In relation to health & safety the group committee’s authority includes:
    • Agreeing the framework of control for health & safety.
    • Monitoring performance of the framework through scrutiny of quarterly health & safety reports and performance information.
    • Reviewing and approving the annual health & safety report and recommending it to the Muir Group Board.
    • Annually reviewing the Health & Safety Policy and recommending it to the Muir Group Board.

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