Terms of reference

Constitution

The Council is responsible for establishing an Audit Committee as a sub-committee of Council without executive powers, operating under terms of reference set by the Council and agreed with the Department for Business, Energy & Industrial Strategy (BEIS).

The Committee will provide a high level and visible forum for monitoring standards of internal control and propriety, economy, efficiency and effectiveness; and for evaluating the extent to which systems and procedures are appropriate to allow the EPSRC’s objectives to be met.

Authority

The Committee is an advisory body with no direct executive powers other than the right to require attendance. It is empowered to conduct any investigation at its discretion or at the request of Council, and to seek such information as it believes necessary in order to discharge its role. Officers of the Council are required to co-operate in helping the Committee fulfil its terms of reference.

The Committee is empowered to refer any issue to the external auditors and may seek independent professional advice if it considers this to be necessary.

Membership

The Committee shall normally consist of a Chair, and between three and six non-executive members. All permanent members shall be approved by Council. The Chair and at least three others will be non-executive members of Council.

The Secretary shall be a member of staff of the CEO, Strategy and Planning Group.

Frequency of Meetings

The Committee shall meet as appropriate, but normally four to five times a year. Council, the external auditors or the internal auditors may request additional meetings.

Attendance at Meetings

All Committee members shall normally attend meetings. The Chief Executive will attend as invited by the Chair of the Committee. EPSRC’s Chief Operating Officer and the Head of Internal Audit (or a representative) shall normally be in attendance at meetings. The Committee shall have the right to require attendance by any Officer of the Council. A quorum shall consist of two (non-executive) members.

When appropriate, the Committee shall meet the external auditors or internal auditors without any executive members of EPSRC being present.

Minutes

The Secretary shall prepare and circulate to members minutes of meetings of the Committee. The Chair of the Audit Committee will report annually to Council and make an oral report to Council after each Committee meeting.

Budget

Council shall make available such funds as are reasonably required to meet the Committee’s responsibilities.

Duties

The Committee is required to monitor the proper conduct of Council's affairs by the Executive, and to give an assurance to Council annually. The Chair of the Committee shall have discretion as to how this objective shall be achieved. The main responsibilities will include:

  1. Generally to review the statutory accounts and other published financial statements and information reports to ensure current best practice is reflected;
  2. To monitor the relationship with external audit to ensure that there are no restrictions on the scope of statutory audit; to receive reports of the external auditors, review the activities, findings, conclusions and recommendations of the external auditors; and to consider and monitor action on all reports submitted by the external auditor;
  3. To examine the manner in which management ensures and monitors the adequacy of the nature, extent and effectiveness of internal control systems – financial and other;
  4. To assess the scope and effectiveness of the systems established to identify, assess, manage and monitor financial and non-financial risks. To pay particular attention to risks and contingency plans on all business critical projects and report to Council where plans or progress are such as to prejudice Council's operations;
  5. To monitor the scope and nature of the work of the Internal Audit function and to give informed approval to Council’s short and long term internal audit programmes as meeting the needs of Council;
  6. To receive and review an annual report from the Head of Internal Audit on the progress against plans agreed with Management and the Audit Committee; where considered necessary, to receive and review individual audit reports, and on occasion to commission audit assignments to be conducted on the Committee's behalf;
  7. To keep under review and advise on the operation of the EPSRC's policies for promoting ethical behaviour in the conduct of research and training by those in receipt of EPSRC's support.