STANDING COMMITTEE OF COUNCIL
TERMS OF REFERENCE
The Finance, Audit, & Risk Management Committee (the ‘Committee’) is a standing committee of the Council. These terms of reference sets out the roles and authority of the Committee. The Council will appoint the Committee Chair and Committee members based on individual skills, insights and expertise.
1. Objective and Role
The objective of the Committee is to provide advice and assistance to the Council on matters relating to the financial and risk management of the organization.
The Committee will achieve its objective by reviewing, advising and making recommendations to the Council on:
i. the integrity of financial management, internal control and reporting systems;
ii. the annual operating budget and associated financial and non-financial reports;
iii. systems for ensuring compliance with regulatory and contractual obligations in relation to financial management, risk management and external reporting;
iv. the appointment and performance of the external auditor;
v. internal control systems;
vi. business and investment management policies and activities;
vii. the risk management system; and
viii. the quality and integrity of internal and external reporting of financial and non-financial information.
2. Authority
The Committee has no authority to make a decision on behalf of the Council except as set out in these Terms of Reference or as otherwise delegated by the Council. Committee members do not direct AAO staff in potential work activities and any such assistance be requested through the CEO.
To facilitate Committee operations, the Committee:
i. Will oversee the appointment, remuneration and work of the external auditors, including meeting with the external auditors to review the annual audit plan and approve all auditing and non-audit services;
ii. Has unrestricted access to all relevant AAO records (e.g. financial and non-financial, information systems, risk management and compliance records) and the external auditors;
iii. May investigate any matter within its terms of reference, and direct external consultants to conduct such investigations; and
iv. May call for relevant members of staff, and external consultants, to be present at a meeting of the Committee, if required.
3. Composition and Term of Appointment
i. The Committee will be comprised of a minimum of three and a maximum of five members. The Committee may seek the services of other members or individuals outside of the Council (at the AAO’s expense, as approved by the Council) with specific skills and experience to assist the Committee in undertaking specific tasks.
ii. The Chair of the Committee shall be a member of the AAO Council.
iii. The Council will review the term of appointment of Committee members annually.
iv. Committee members should be financially literate (understand business and investment practices, budgets and financial statements).
v. All Committee members must sign the Oath of Confidentiality and Conflict of Interest documents to participate.
vi. Committee members are participating as volunteers.
Committee Members
i. Dr. Darren Wagner - Chair
ii. Dr. Kent Manville - AAO member
iii. Dr. T.H. Poon - AAO member
v. Dr. Connor West - AAO member
vi. Dr. Colin Hobson - AAO member
4. Functions
The Committee will perform its functions by developing and implementing processes governing financial management, investments and reporting, and risk management and compliance as set out below:
4.1 Financial Management, Investments and Reporting
Review with management, assess and make recommendations to the Council on:
i. the annual budget and its alignment with approved business plans, including analyses and explanations of any significant variances against the approved budget;
ii. the effectiveness of internal controls to manage unusual or major financial transactions and /or risks;
iii. the processes used to monitor and comply with laws, regulations and other requirements, including policies approved by the Council relating to investments and reporting of financial and non-financial information;
iv. the adequacy of internal and external financial reports, and the adequacy of internal control systems in relation to financial management, investments and reporting;
v. contracts, agreements or other instruments involving the financial and non-financial affairs of AAO;
vi. guidelines and controls for all financial transactions to ensure transparency and accountability;
vii. review the annual audited financial statements before their presentation to the Council for approval; and,
viii. review the external auditors’ management letter and the Chief Executive Officer’s responses before submitting both to the Council.
4.2 Risk Management and Compliance
Periodically review with management, assess and make recommendations to the Council on:
i. the effectiveness of internal processes to monitor operational risks (e.g. legal, Workplace Health and Safety, and information technology and systems) and to ensure appropriate strategies are in place to mitigate identified risks;
ii. risk appetite, risk policy and the risk management framework;
iii. adequacy of insurance policies;
iv. periodically review the appointment of the external auditor and recommend changes to the Council, as appropriate;
v. review the terms of the audit engagement and meet with external auditors to review results and discuss the adequacy and effectiveness of accounting and financial controls, including AAO policies and procedures to assess, monitor, and manage business risk, and legal and ethical compliance programs; and
vi. periodically review and recommend changes to the overall effectiveness of AAO’s compliance policies and programs.
5. Committee Operations
The Committee will meet as frequently as required to carry out its functions but will meet not less than four times per year. A majority of the Committee membership constitutes quorum.
The Committee Chair should ascertain at the beginning of each meeting any conflicts of interest and ensure details are recorded in the minutes of the meeting.
The Committee members must ensure that they understand AAO structure, controls and types of transactions in order to adequately assess the significant risks faced by AAO in its operating environment.
The proceedings all of Committee meetings are to be minuted and included in all Council papers. Where a decision is required, a recommended resolution is to be included in the minutes of the Committee meeting, relevant report or written submission.
The Chief Executive Officer or their designate will participate in all Committee meetings. Other staff may attend meetings as required by the Committee and Chief Executive Officer. The Chief Executive Officer, or their designate, attending meetings of the Committee shall not have a vote on Committee resolutions.
The Minutes of each Committee meeting shall be signed and dated by the Chair of the Committee after they have been approved at the next meeting of the Committee.
The Chair of the Committee will provide a written annual report to the Council.
For the purpose of supporting the independence of the Committee and its functions, the Committee will meet at least once annually with the external auditor without the presence of the Chief Executive Officer or other staff.