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Terms of Reference

Duties

1. The duties of the Committee shall be:

To consider the appointment of the internal auditors, the audit fee, and any questions regarding the resignation or dismissal of the internal auditors, and to review the independence and objectivity of the auditors and matters related to the provision of non-audit services, and to manage the appointment of the NAO as external auditors.
To oversee risk management throughout Ofcom, and ensure that the risk management policy is effective, consistent with the Board’s policies towards risk. Risk management will include a review of the insurance arrangements and treasury and cash management policies.
To approve the financial authority framework.
To discuss with the external auditors, before the audit commences, the nature and scope of the audit and to review the cost effectiveness, independence and objectivity of the auditors.
To discuss with the internal auditors and approve the strategic internal audit plan, and in each year the nature and scope of their audit programme.
To consider any issues arising from the interim and final audits, and any matters which the external auditors may wish to discuss (in the absence of Ofcom executive staff, if the Committee so determines).
To review the external auditor's management letter, if any, and the management response and action plan.
To consider and advise the Board regarding the major findings of internal audit, if any, and the management response and action plan.
To advise the Board in relation to the annual report of the Head of Internal Audit, particularly in respect of the opinion provided regarding the organisation’s risk, governance and internal control framework.
To advise the Board and make any recommendations with respect to the content of the draft Annual Financial Accounts.
To consider other topics, as directed by the Ofcom Board.
To consider any matters brought to it by any sub-committees that it has set up.
To set and monitor performance measures for the internal and external auditors.

Authority

2. The Committee is authorised by the Ofcom Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from Ofcom colleagues, and Ofcom colleagues are directed to co-operate with any request made by the Committee.

3. The Committee is authorised to obtain external legal or other independent professional advice if it considers this necessary.

Membership

4. The Committee shall be appointed by the Ofcom Board from amongst its (part-time) Members or from outside the Board and shall consist of not fewer than three Members. A quorum shall be two Members. Members’ attendance through telephone or videolink is permissible for the purposes of determining a quorum. Where the Chairman of the Committee considers it appropriate decisions may be taken by email.

5. The Chair of the Committee shall be appointed by the Ofcom Board. The person appointed will be external to Ofcom. If the appointed Chair is external to Ofcom then such individual shall have direct access to the Chairman of Ofcom (and through the Chairman, the Ofcom Board) to discuss any issue arising from the Audit Committee’s work.

Attendance at Meetings

6. The Chief Executive and the Finance Director and Head of Financial Accounting and a representative of the internal and external auditors shall normally attend meetings. Other (independent) Ofcom Board Members shall have a right of attendance.

7. The Secretary to the Corporation or such other person as the Committee decides shall be the Secretary to the Committee.

Frequency and Purpose of Meetings

8. Meetings shall be held not less than three times a year with at least one meeting held to review the Ofcom Annual Report.

9. Reports from the Internal Auditors relating to operational reviews will be presented to each meeting of the Audit Committee on completion and in accordance with an agreed timetable. Any Member of the Board or the external auditors may request a meeting if they consider that one is necessary.

Reporting Procedures

10. The Secretary to the Committee shall circulate the minutes to all Members of the Ofcom Board.

11. The Chairman of the Audit Committee will provide a written report at the next available Ofcom Board meeting of any significant issues arising from the previous Audit Committee meeting.

12. The Chairman shall report annually to the Accountable Officer on the activities of the Audit Committee.