COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL
MEETING OF SOUTH DUBLIN COUNTY COUNCIL
Monday, October 08, 2007
HEADED ITEM NO. 4(d)
STANDING COMMITTEES - ORGANISATION, PROCEDURE AND FINANCE COMMITTEE - 20TH SEPTEMBER 2007
Audit Committee Membership and Draft Charter
The following report was presented to the Members at the Organisation, Procedure and Finance Committee Meeting held on 20th September 2007:
“Circular F11/07 (23rd May 2007) relating to the Audit Function in Local Authorities, provides for an enhanced role for audit committees in accordance with the Local Government (Business Improvement Districts) Act 2006.
These new provisions reflect best practice and developments in corporate governance in both the public and private sectors, and also flow from recommendations in Report No. 23 by the Value for Money Unit of the Local Government Audit Service on the Development of Internal Audit in Local Authorities.
The functions of an audit committee under the new provisions are to:
§ review financial and budgetary reporting practices and procedures
§ foster the development of best practice in the internal audit function
§ review auditors’ reports and special reports and assess follow-up action by management
§ assess and promote efficiency and value for money
§ review risk management systems
§ make such recommendations to the authority as the committee considers appropriate in relation to the foregoing
The new provisions provide for the making of regulations by the Minister in relation to the membership of audit committees, the holding of meetings, reporting, performance of the functions of an audit committee, etc. Pending the making of regulations, each city and county council is now requested to put in place arrangements for the setting up of an audit committee as early as possible and not later than end October 2007.
Membership of the South Dublin County audit committee shall be 7 members, including at least 4 external members, and not more than 3 serving or retired Councillors. The committee shall be:
· established by resolution of the Council with the external members being approved by the Council on the nomination of the Manager following consultation with the Mayor
· at least two of the external members should have financial management/audit expertise
· The chair of a committee will be selected by its members and, in line with best practice, will be one of the external members
· Council officials cannot be committee members
· Appointments to a committee will be for the duration of the elected council
· There should be at least four meetings per year
· The quorum will be four members”
It is now necessary to:
- agree on the appointment of the three councillor / former councillor members of the committee and
- agree on the attached draft charter under which the audit committee will operate.
A report will be submitted to the October Council meeting to approve the membership and charter for the audit committee.
DRAFT
South Dublin County Council
Audit Committee Charter
Role of the Committee
The Audit Committee will have an independent role in advising the Council on financial reporting processes, internal control, risk management and audit matters, as part of the systematic review of the control environment and governance procedures of the Council.
The Committee will have a role in promoting good accounting practices, ensuring better and more informed decision-making, and improving the focus on value for money throughout the organisation. It will also support the work of the Internal Audit Unit and advise the Manager in relation to the operation and development of the Unit.
The Committee’s role is advisory.
Functions
The functions of the Committee shall be to:
· Review the Council’s financial and budgetary reporting practices and procedures,
· Generally foster the development of best practice in the internal audit function and, as part of this:
o Review the internal audit charter and bring any recommendations to the attention of the Manager,
o Review and assess the draft annual internal audit plan,
o Monitor implementation of the internal audit plan on a quarterly basis and the extent to which audit objectives are being achieved,
o Assess the outcome of the internal audit process, having regard to any findings and recommendations of the internal audit unit and managementreponses thereto,
o Assess the implementation of agreed corrective actions by management having regard to follow-up audits,
o Review the report of audit activities by the Internal Audit Unit, within three months of the year end,
· Request special reports from Internal Audit as considered appropriate,
· Review Local Government Auditors’ reports, and assess management response and follow-up actions,
· Assess and promote value for money/efficiency, including collection performance across income streams,
· Consider whether processes are in place to manage risks effectively, in accordance with organisational guidelines and business plans,
· Report to the Council at least annually, and in any event within three months of the end of each calendar year, providing such advice and making such recommendations, if any, to the Council as the committee considers appropriate.
Membership
The audit committee shall have seven members including at least four external members and not more than three serving or retired Councillors.
The Committee will be established by resolution of the Council and the external members will be approved by the Council on the nomination of the Manager following consultation with the Mayor. Appointments to the Committee shall be for the duration of the elected Council, with subsequent committees to be established within three months of the first meeting of each council.
The Chair of the Committee shall be selected by its members, and shall be one of the external members.
At least two of the external members should have financial management/audit expertise. Training and support should be provided to assist members in discharging their functions.
Meetings
The Committee shall meet at least four times a year. The quorum necessary for the transaction of business shall be four members. In the absence of the chairperson, those present shall select a chairperson for the meeting. A copy of the minutes of meetings shall be forwarded to the Manager.
The Manager, Directors of Service (including the Head of Finance) and the Head of the Internal Audit Unit should attend meetings, when requested to do so by the committee.
The Manager will facilitate the Committee in relation to briefings required by them from him/her and/or other council officials.
Independence
The committee shall be independent in the performance of its functions and responsibilities and shall not be subject to direction or control from any other party.
Working Procedures
The Committee will adopt its own working procedures, which may include as necessary the commissioning of independent professional advice following due notice to the Council and the Manager.
Access
The Chairperson of the Committee, or any other member of the committee acting with the specific authority of the Chairperson, will have the right of access to the Manager and to the Mayor of the Council.
The Chairperson of the Committee will invite the relevant Local Government Auditor to meet the Committee at least once a year to discuss matters of mutual interest.
The Local Government Auditor or the Head of the Internal Audit Unit may, with the agreement of the chairperson of the committee, request a meeting to discuss a matter of exceptional importance.
The Local Government Auditor and the Head of Internal Audit may communicate with the Committee as they consider necessary.
Reporting
In presenting a report to the Council, the committee shall simultaneously forward a copy
of the report to the Manager.
Following presentation of an annual or other report by the committee, the Council will be entitled to discuss the findings with the Manager.
Amendment of Charter
This Charter may be amended or updated by resolution of the Council.
Dated: 8th October 2007.”
The following Councillor nominations to the Audit Committee were AGREED:
It was proposed by Councillor T. Ridge, seconded by Councillor S. Laing and AGREED:
“That Councillor G. O’Connell be appointed to the Audit Committee.”
It was proposed by Councillor E. Maloney, seconded by Councillor T. Ridge and AGREED:
“That Councillor J. Hannon be appointed to the Audit Committee.”
It was proposed by Councillor S. Laing, seconded by Councillor T. Ridge and AGREED:
“That Councillor S. O’Connor be appointed to the Audit Committee.”
In relation to the Draft Audit Committee Charter:
It was proposed by Councillor G. O’Connell, seconded by Councillor M. Ardagh and RESOLVED:
“That the Draft Audit Committee Charter be ADOPTED and APPROVED.”
Report to County Council Meeting, 8th October 2007
Following consultation between the County Manager and Mayor Billy Gogarty, under the terms of Circular F11/07 (23rd May 2007), it has been agreed to put forward the following external members of the Audit Committee to the Council for approval:
- Nominee from the Adelaide and Meath Hospital, Tallaght with audit experience
- Nominee from the Institute of Technology, Tallaght with financial management experience
- Nominee from South Dublin Chamber with financial management experience
- Nominee from South Dublin Chamber with general management experience
It is considered that together with the three Council nominees, the external members proposed will constitute a very strong team to perform the role laid down for the audit committee in the draft charter. Confirmation has been received from all proposed nominating bodies that they are prepared to serve on the committee.
It is recommended that the following resolution be passed:
“In accordance with the terms of Circular F11/07 (23rd May 2007) in relation to the formation of the Audit Committee, it is resolved that
a) the three Council nominees shall be Councillor G. O’Connell, Councillor J. Hannon and Councillor S. O’Connor,
b) that the external members shall consist of nominees from the Adelaide and Meath Hospital, Tallaght with audit experience, the Institute of Technology, Tallaght with financial management experience, South Dublin Chamber with financial management experience and South Dublin Chamber with general management experience and
c) that the Audit Committee Charter be approved as recommended by the Organisation, Procedure and Finance Committee”