hscf-2014-17 Audit And Risk Assurance Committee Handbook _NI

Subject:
AUDIT AND RISK ASSURANCE COMMITTEE
HANDBOOK (NI)
For Information to:
Chief Executive and Director of Finance of each HSC
Body and NIFRS.
Summary of Contents:
The purpose of this DAO is to advise Accounting
Officers of the introduction of the Audit and Risk
Assurance Committee Handbook (NI)
Circular Reference:
HSC 17/2014
19 March 2014
Superseded Documents:
Related Documents:
DAO (DFP) 7/07
DAO (DFP) 06/13
DAO (DFP) 05/14
Expiry Date:
Not Applicable
Enquiries:
Any enquiries about the contents of this Circular
should be addressed to:
Finance Policy, Accountability and Counter Fraud Unit
(FPACFU)
Room D3
Castle Buildings
Stormont Estate
BELFAST
BT4 3SQ
Tel: 028 90765647
[email protected]
Status of Contents:
For Information and action if
appropriate
DFP DELEGATED LIMITS
Purpose
1. The purpose of this circular is to advise you that DFP has issued the
following letter: DAO (DFP) 05/14: AUDIT AND RISK ASSURANCE
COMMITTEE HANDBOOK (NI). A copy of this letter is attached.
Background
2.
The attached DAO updates the guidance available to Audit Committees.
In 2007 DFP issued HM Treasury’s Audit Committee Handbook (DAO
(DFP) 7/07) and whilst much of the original 2007 Audit Committee
Handbook remains relevant, the recent update of the Corporate
Governance Code of Good Practice (NI) (issued under DAO (DFP)
06/13 in April 2013) has made an update to the guidance appropriate.
Action
3.
Please ensure that this circular is brought to the attention of the
appropriate staff within your area of responsibility and that any relevant
action points are noted.
Further Guidance
4.
For further details please refer to the attached annex.
Enquiries
5.
Should you have any queries please contact Elaine Cunningham on
02890 765648 or [email protected].
Paula Shearer
Finance Policy, Accountability and Counter Fraud Unit
Mike Brennan
Budget Director
Public Spending Directorate
Room P6
Rathgael House
Balloo Road
BANGOR BT19 7NA
Tel No: 028 91858151 (x 68151)
email: [email protected]
and
[email protected]
DAO (DFP) 05/2014
Dear Accounting Officer
AUDIT AND RISK ASSURANCE COMMITTEE HANDBOOK (NI)
Introduction
1.
The purpose of this DAO is to advise Accounting Officers of the
introduction of the Audit and Risk Assurance Committee Handbook (NI).
2.
The Audit and Risk Assurance Committee Handbook sets out a clear set
of principles that should be followed.
The assumption, for all
organisations for which the Handbook is applicable, is that the principles
will be followed and therefore a requirement to report annually on a
“comply or explain” basis has been adopted.
Background
3.
In 2007 DFP issued HM Treasury’s Audit Committee Handbook (DAO
(DFP) 7/07) and whilst much of the original 2007 Audit Committee
Handbook remains relevant, following the recent update of the Corporate
Governance Code of Good Practice (NI) (issued under DAO (DFP)
06/13 in April 2013) it is an appropriate time to update the guidance
available to Audit Committees. In doing this we have also taken account
of HM Treasury’s review of the original Audit Committee Handbook
guidance.
Applicability in the NI Context
4.
As was the case with the previous Audit Committee Handbook the new
Audit and Risk Assurance Committee Handbook (NI) applies to
departments, agencies, Non Departmental Public Bodies and other
arm’s length bodies. Individual organisations should consider the
principles contained within the Audit and Risk Assurance Committee
Handbook (NI) in light of their own governance/board structures.
5.
When DFP issued the Audit Committee Handbook in 2007 we advised
that Audit Committees should be made up of a majority of non
executives to maintain the Committee’s independence. We now consider
that Audit and Risk Assurance Committees should ideally be fully
comprised of non executive members. However, given the limited
numbers of non executives on some boards we consider it remains
appropriate for senior officers from other public bodies to be appointed
as independent external members of Audit and Risk Assurance
Committees.
6.
DFP consider that this arrangement has generally worked well over
recent years and it is satisfied that it should continue in order to provide
Audit and Risk Assurance Committees with the independence and
particular skills sets which are required. It is however important to note
that where such independent external appointments are made, the
appointment should not be directly reciprocated between organisations.
Furthermore these should not be remunerated positions.
Implementation Date
7.
The principles of the new Audit and Risk Assurance Committee
Handbook (NI) should be applied for the 2014/15 financial year onwards.
Comply or Explain
8.
The requirement to comply or explain with the Audit and Risk Assurance
Committee Handbook (NI) principles, as stated at paragraph 1.5 of the
Handbook should be applied and reported on for the 2014/15 financial
year.
Withdrawal
9.
DAO (DFP) 7/07 - Audit Committee Handbook will be withdrawn on 1
April 2014.
Action
10. This DAO should be brought to attention of Audit (and Risk Assurance)
Committee Chairs and Members, relevant staff in your department and
agencies, and relevant arm’s length bodies.
Queries
11. Any queries regarding this letter or the Audit and Risk Assurance
Committee Handbook (NI) should be addressed to Alison Caldwell
([email protected]) telephone: 028 91858249 ext 68249 or
Paddy Hoey ([email protected]) telephone: 028 91858208 ext
68208.
Yours sincerely
MIKE BRENNAN

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