Audit and Risk Assurance Committee Terms of Reference

 

Health and Safety Executive for Northern Ireland

Audit and Risk Assurance Committee (ARAC) - Terms of Reference

Note: These terms of reference are based on the Example Terms of Reference for an Audit and Risk Assurance Committee contained in the Department of Finance Audit and Risk Assurance Handbook April 2018 (finance-ni.gov.uk - PDF format)

Constitution

1. The Board of the Health and Safety Executive for Northern Ireland (HSENI) has established an Audit and Risk Assurance Committee as a Committee of the Board to support it in its responsibilities for issues of risk, control and governance and associated assurance by:
   1. Reviewing the comprehensiveness of assurances in meeting the Board/Designated Accounting Officer’s assurance needs
   2. Reviewing the reliability and integrity of these assurances
   3. Providing an opinion on how well the Board and Designated Accounting Officer are supported in decision making and in discharging their accountability obligations (particularly in respect of financial reporting)

Membership

2. The Committee comprises a minimum of two and up to four HSENI Board Members, one of whom fulfils the role of Committee Chair.
3. The ARAC Chair should be involved in the appointment of new Committee members, including providing advice on the skills and experience being sought by the Committee when a new member is appointed. The ARAC Chair and its members are appointed by the Chair of the Board and further guidance on appointments is referred to in HM Treasury’s Audit and Risk Assurance Handbook and the Cabinet Office’s ‘Making and Managing Public Appointments’ publication.
4. The skills base required for Audit and Risk Assurance members is outlined in both HM Treasury and the Department of Finance’s Audit and Risk Assurance Committee Handbook.
5. The Audit and Risk Assurance Committee will be provided with a secretariat function by HSENI’s Corporate Support Group.

Reporting

6. The Committee will formally report back in writing to the Board after each meeting by tabling draft minutes of its proceedings and a summary report. These will be presented to the Board by the Committee Chair or in his/her absence, another member of the Committee. The Committee will provide the Board with an annual report timed to support finalisation of the accounts and the Governance Statement, summarising its conclusions from the work it has done during the year.

Responsibilities

7. HSENI’s Audit and Risk Assurance Committee will advise and provide assurance to the Board and Designated Accounting Officer on:
   1. The strategic processes for risk, control and governance and the Governance Statement
   2. The accounting policies, the accounts and the annual report of the HSENI, including the process for review of the accounts prior to submission for audit, levels of error identified and management’s letter of representation to the external auditors
   3. The planned activity and results of both internal and external audit
   4. The adequacy of the management’s response to issues identified by audit activity, including external audit’s management letter
   5. Assurances relating to the management of risk and corporate governance requirements for HSENI
   6. Assurance for HSENI Business Continuity Plans
   7. Assurances relating to cyber security and its associated risks
   8. Proposals for tendering for internal audit services or for purchase of non-audit services from contractors who provide audit services
   9. Assurances on anti–fraud and raising concerns ‘whistleblowing’ processes, including the effectiveness of procedures in place to prevent fraud and protect those who raise concerns
   10. Information on any special investigations in relation to fraud, whistleblowing or governance issues which fall within the remit of the ARAC
   11. The review of the Internal Audit Charter
8. The Committee will also annually review its own effectiveness and report the results of that review to the Board.

Rights

9. The Committee may:
   1. Co-opt additional members for a period not exceeding a year to provide specialist skills, knowledge and experience
   2. Procure specialist ad-hoc advice at the expense of HSENI, subject to the approval of the Board and, if outside delegated authority, HSENI’s sponsor Department
10. There should be mutual rights of access among the Chair of the Audit and Risk Assurance Committee, the Accounting Officer, Head of Internal Audit and the External Auditor. Periodic discussions outside of the formal meeting help to ensure that expectations are managed and that there is mutual understanding of current risks and issues.

Access

11. The representatives of Internal and External Audit will have free and confidential access to the Chair of the Audit and Risk Assurance Committee. Bilateral meetings should take place at least annually between the Chair and the Accounting Officer, the Head of Internal Audit and a representative from External Audit. The Chair should arrange for Audit and Risk Assurance Committee meetings to be immediately preceded by a meeting between members and Internal Audit (and, where possible, External Audit) to help give focus to discussion.

Meetings

12. The Committee will meet at least four times per year on such dates that allow for the requisite and proper level of reporting to the HSENI Board and Departmental Audit Committee. The Chair of the Audit and Risk Assurance Committee may convene additional meetings, as they deem necessary.
13. The Board or the Accounting Officer may ask the Audit and Risk Assurance Committee to convene further meetings to discuss particular issues on which they want the Committee’s advice.
14. A minimum of two Non-Executive Board members of the Committee must be present at all times for the meeting to be deemed quorate.
15. Committee meetings will normally be attended by:
    1. HSENI’s Designated Accounting Officer (HSENI Chief Executive)
    2. A representative from HSENI’s Corporate Support Group
    3. A representative from HSENI’s sponsor Department (DfE)
    4. A representative from Internal Audit
    5. A representative from External Audit (NIAO)
    6. HSENI’s Head of Financial Management Unit/ Accountant for meetings where the accounts or other specific financial matters require discussion
16. The Committee may ask for any other HSENI officials to attend to assist with its discussions on any particular matter.
17. The Committee may ask any or all of those who normally attend but who are not members to withdraw to facilitate open and frank discussions of particular matters.

Information requirements

18. For each meeting the Committee will be provided with:
    1. An updated Risk Register
    2. A progress report from the Internal Audit representative summarising:
       1. Work performed (and a comparison with work planned)
       2. Key issues emerging from Internal Audit work
       3. Management response to audit recommendations
       4. Changes to the internal audit plan of work including any resourcing issues affecting the delivery of Internal Audit objectives
    3. A progress report from the External Audit representative summarising work done and emerging findings
    4. Management Assurance Reports
    5. Reports on the management of major incidents, ‘near misses’ and lessons learned
19. As and when appropriate, the Committee will also be provided with:
    1. Proposals for the terms of reference of Internal Audit (Internal Audit Charter)
    2. The Internal Audit Strategy
    3. Internal Audit’s Annual Opinion and Assurance Report
    4. Draft terms of reference for individual internal audit reviews
    5. Internal Audit assignment reports
    6. Quality assurance reports on the Internal Audit function
    7. Biannual Assurance Statements prior to submission to the Department for the Economy
    8. The draft Accounts
    9. The draft Governance Statement
    10. Management Stewardship reports
    11. A report on any changes to accounting policies
    12. External Audit’s management letter (Report to Those Charged With Governance)
    13. A report on any proposals to tender for audit functions
    14. A report on co-operation between internal and external audit
    15. A copy of the Partnership Agreement template developed to reflect the requirements of DoF’s Partnerships between Departments and Arm’s Length Bodies: NI Code of Good Practice
    16. HSENI’s Risk Management Policy

Review

20. This Terms of Reference should be reviewed annually.

Date reviewed

April 2025.

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• Audit and Risk Assurance Committee Terms of Reference