Terms of Reference

1 Purpose

To review the effectiveness of the University’s corporate governance arrangements, financial systems, internal control environment and risk management arrangements and provide appropriate assurances to Court on these areas.

2 Composition

2.1 The Committee shall consist of at least four and at most six members.

2.2 Four of the members must be lay members of Court at least one of whom shall have a background in finance, accounting or auditing and one of whom shall have a background in information technology, information management, risk management or health and safety. The remaining members may either be lay members of Court or external to the Court and the University with appropriate expertise.

2.3 The Court shall appoint members of the Audit and Risk Committee on the recommendation of the Nominations Committee.

2.4 The Nominations Committee in making recommendations to Court shall take cognisance of any recommendation from the Audit and Risk Committee in regard to external members and the experience required of members of the Audit and Risk Committee.

2.5 The term of office of lay members will be no longer than their membership of Court and will be for a maximum of three years.

2.6 The term of office of external members will be for a maximum of three years.

2.7 Previous members are eligible for re-appointment up to a normal maximum of two consecutive terms of office.

2.8 Court on the recommendation of the Nominations Committee shall appoint the Convener of the Committee who shall be a lay member of Court.

2.9 Members of the Policy and Resources Committee are not eligible for membership of this Committee other than in exceptional circumstances and in any case the Convener of the Audit and Risk Committee cannot also be a member of the Policy and Resources Committee.

2.10 All members of the Audit and Risk Committee are expected to comply with the University’s Code of Conduct as set out in the University’s Handbook and declare any interests which may conflict with their responsibilities as members of the Audit and Risk Committee.

2.11 The Principal in the capacity of Accountable Officer will be invited to attend at least one meeting of the Audit and Risk Committee each year and in particular will be invited to attend that meeting at which the Annual Accounts are to be considered by the Audit and Risk Committee.

2.12 The Chief Internal Auditor and External Auditors will be invited to attend all meetings of the Audit and Risk Committee.

2.13 Other Senior Officers of the University may be in attendance at the Committee, in particular the Convener of the Risk Management Committee, the University Secretary, the Director of Corporate Services, the Director of Finance and the Assistant Director of Finance with responsibility for financial accounting shall be invited to attend all meetings.

2.14 Other individuals from within or out with the University may also be invited to attend meetings from time to time to provide the Committee with information on specific items on the agenda.

3 Meetings

3.1 The Committee will meet as required to fulfil its remit and will meet at least four times each academic year. Meetings may be held in person or virtually by the means of videoconference, teleconference or other means. With the prior approval of the Convener of the Committee urgent matters may be considered through correspondence.

3.2 Meetings will be timetabled on an annual basis and will take account of the schedule for Court meetings to ensure appropriate reporting and to coincide with the Annual Accounting process.

3.3 Minutes, agendas and papers will normally be circulated to members of the Committee at least five working days in advance of the meeting. Late papers may be circulated up to two days before the meeting. Only in the case of extreme urgency and with the agreement of the Convener will papers be tabled at meetings of the Committee.

3.4 Non-contentious or urgent matters not on the agenda may be considered at a meeting subject to the agreement of the Convener of the meeting and the majority of members present.

3.5 Minutes, agendas and papers will also be circulated to those routinely in attendance at meetings at least four working days in advance of the meeting unless the originator of the paper otherwise determines. Any other person in attendance at the meeting will be issued with papers appropriate to their reason for attendance.

3.6 Papers will indicate the originator/s and purpose of the paper, the matter/s which the Committee is being asked to consider and any action/s required and confirm the status of the paper in respect of freedom of information legislation.

3.7 Three members of the Committee shall be a quorum. This number must include two lay members one of whom shall be appointed Convener by the majority of members present for the duration of the meeting should the Convener not be present.

3.8 A formal minute will be kept of proceedings and submitted for approval at the next meeting of the Committee. The draft minute will be agreed with the Convener of the Committee prior to circulation and in the case of the absence of the Convener at a meeting the Committee member appointed to act as Convener for the duration of that specific meeting.

4 Remit

Corporate governance and internal control

4.1 To keep under review the effectiveness of the University’s corporate governance arrangements, and its financial and other internal control systems, including in particular the system of risk management, and to offer Court an opinion on these matters annually.

4.2 To review the effectiveness of the arrangements for the investigation of questions of financial irregularity or impropriety and oversee the University’s Fraud and Misappropriation Policy, including being notified of any action taken under that policy.

4.3 To ensure compliance with the mandatory requirements in relation to the University's audit arrangements as set out in the Financial Memorandum between the University and the SFC.

4.4 To be responsible for reviewing the University's Annual Report and Accounts including the external auditor’s formal opinion, corporate governance statements, and the statement of internal control and reviewing any changes in accounting policy, or statutory and other requirements and make recommendations to Court accordingly.

Internal and external audit

4.5 To communicate directly with the internal and external auditors on audit approach, reporting timetable, findings and management's response.

4.6 To review the scope, effectiveness and performance of the internal audit service on an annual basis including its planning and operation with a view to obtaining an assurance on the quality of the work and reviewing the results of internal audit's annual report.

4.7 To report to the Court and be advisory to it: to receive and make recommendations to the Court in respect of plans prepared by internal audit, the internal audit's annual report and the report of the external auditors.

4.8 To advise the Court on the criteria for the selection, appointment and remuneration of the external auditors and review the scope, effectiveness and performance of the external audit service on an annual basis and the quality of their work.

4.9 To advise the Court on the criteria for the selection and appointment of the Head of the Internal Audit Service.

4.10 To consider any other audit related matters, including issues arising from reports of external bodies such as Audit Scotland, the National Audit Office and the Scottish Higher and Further Funding Council.

4.11 To investigate such financial matters as is deemed necessary, whether or not these relate to issues of, or possible failures in, corporate governance.

Risk Oversight

4.12 To monitor the performance and activities of the Risk Management Committee and report there on to Court and in particular:

4.12.1 To advise Court on the adequacy and effectiveness of policies and procedures for risk management;

4.12.2 To annually review the University’s approach to risk management and, if appropriate, recommend changes or improvements to key elements of its processes, policies and procedures;

4.12.3 To provide an annual statement to the Court in relation to effective risk management.

4.13 To be responsible for the oversight of the assessment of strategic risks that threaten achievement of the University’s objectives, reviewing the University Risk Register and presenting the Register to Court for approval.

Value for money

4.14 To monitor and be satisfied that appropriate arrangements are in place to promote economy, efficiency and effectiveness and to receive an annual report from management on such activities to enable it to offer Court an opinion on these matters annually.

5 Other

5.1 The Convener of the Audit and Risk Committee shall on an annual basis arrange a private meeting with the Chief Internal Auditor and with the lead External Auditor to include other members of the Committee to discuss any matter regarding the remit of the Committee. The minute of the subsequent routine meeting of the Audit and Risk Committee will only confirm that these private meetings have been held with no reference to any matters discussed.

5.2 The Committee will undertake an annual review of its own performance and effectiveness and report thereon to Court.

5.3 In order to fulfil its remit the Committee may obtain external professional advice as necessary.

5.4 A report on specific points discussed at each meeting will be provided to the subsequent meeting of Court.

5.5 An annual Audit and Risk Committee Report will also be prepared and presented to Court in conjunction with the Annual Accounts to provide assurances to Court covering the following areas:

• Membership of the Committee
• Annual Internal Auditor’s Report
• Internal Audit Plan for subsequent year
• External Auditor’s appointment and remuneration
• Comment on consideration of the Annual Reports and Accounts, External Auditor’s opinion and Management Letter
• Statement on internal control environment
• Statement on fraud and irregularity
• Annual Report and Statement on economy, efficiency and effectiveness
• Annual Report of Risk Management Committee and Statement on risk management
• Statement on corporate governance arrangements
• Information Systems Annual Assurance Report

5.6 Agendas, papers and approved minutes will be published on the University’s website in accordance with the University’s agreed publication scheme and status of the above listed in respect of freedom of information legislation. This will include details on the membership of the Committee and attendance at Committee meetings.

5.7 To undertake such other responsibilities as the Court may determine.

Approved 12 May 2014, last updated 14 June 2021.