CONTENTS :

1. INTRODUCTION
2. RESPONSIBILITIES

2.1 Responsibilities Related to Management
2.2 Responsibilities Related to the Internal Audit Function
2.3 Responsibilities Related to the External Audit Function by the Auditor General

3. STRUCTURE AND POWER OF THE COMMITTEE

3.1 Membership and Size of Committee
3.2 Meetings
3.3 Report Procedure
3.4 Powers

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Management is required to continuously review current trends and best practice in relation to corporate governance.

As a part of management's plans to fulfil its obligations to demonstrate greater accountability and ensure a higher quality of service, an Audit Committee has been established.

This charter sets out the specific responsibilities delegated by Council to the Committee and details the manner in which the Committee will operate.

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2.1 Responsibilities Related to Management
The Committee shall assist management in carrying out its responsibilities in terms of legislation through :
• approving the Internal Audit strategy and operational plans and reviewing performance against them;
• discussing with the Manager: Internal Audit findings contained in reports and the response of management to major recommendations as well as the Manager: Internal Audit's views on the quality of internal control;
• considering the objectives and scope of any additional work undertaken by the Internal Audit Department to ensure there are no conflicts of interest and that independence is not compromised;
• meeting with the Manager : Internal Audit as deemed necessary;
• facilitating a risk management assessment to determine the material risks to which the institution may be exposed and evaluating strategy for managing those risks. (The strategy will be used to direct internal audit effort and priority);
• reporting on the effectiveness of internal control in the annual report of the institution.
• considering the quarterly institutional performance management reports of the Manager: Internal Audit to the City Manager,
• reviewing the municipality's institutional performance management system based on the principles of economy, effectiveness and impact insofar as the key performance indicators and targets are concerned and making recommendations relating thereto,
• reporting at least twice during a financial year to the Council on all matters related to the performance management system and its operation

2.2 Responsibilities Relating to the Internal Audit Function
The Committee shall ensure that the Internal Audit Department performs their responsibilities effectively and efficiently through :

• reviewing the plans of the Internal Audit Department and ensuring that the plans address the high risk area;
• reviewing the audit results and action plans of management;
• supporting the independence of the Internal Audit Department by supporting communication with management;
• ensuring direct access by the Manager : Internal Audit to the Committee, the Chairperson of the Committee and City Manager.

2.3 Responsibilities Related to the External Audit Function by the Auditor General
The Committee shall :

• ensure that there are no restrictions or limitations placed on the auditors;
• in consultation with the Manager: Internal Audit review audit results and action plans of management;
• consider significant disagreements between external auditors and management;
• consider material unsolved accounting and auditing problems;
• ensure direct access by the external auditors to the City Manager.

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3.1 Membership and Size of Committee
The Committee will comprise of five (5) members, with the majority of the members consisting of non-official members.

The Chairperson of the Committee will be appointed by the Council from one of the non-official members.

The Non-Official Members will be drawn from the following spheres of business :

• one from the accounting profession;
• one from the legal profession;
• one from the business/industrial sector.

The Official Council Members will consist of the following :


• 2 members to be appointed by the Executive Mayor

Ex-Officio Members will include :

• the City Manager;
• the Manager: Internal Audit;
• the Chief Financial Officer.

The following will be invited to all Committee Meetings :

• an invitee from the office of the Auditor General;
• anyone else whom the Committee wishes to invite.

The Director of Corporate Services shall provide secretarial support to the Committee and ensure that reports and minutes are circulated to all members of the Committee.

The members shall serve on the Committee for a period of two years renewable to a maximum of three years reckoned from the date on which the member actually assumes duty on the terms and conditions mentioned in the contract.

3.2 Meetings
A minimum of four ordinary meetings shall be held during a year (one meeting per quarter). Special meetings of the Committee may be convened as required.

The internal or external auditors may request a meeting if they consider that one is necessary.

The proceedings of all meetings will be documented and minuted.

Quorum
The quorum for meetings will be three members, two (2) from the non-official members and one (1) from the official members.

3.3 Reporting Procedure
The Chairperson of the Committee shall report to the City Manager as necessary and shall at least annually summarising the activities, recommendations and decisions of the Committee during the previous financial year.

The Committee may determine its own procedures in consultation with the Executive Mayor.

3.4 Powers
The Committee may, through generally accepted channels, require any official to appear before it to provide comment or answer any questions on any report or matter under consideration.

The Committee may if it deems it necessary report direct to the Executive Mayor or the Council in its own name.

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