Audit Committee

Purpose

The Audit Committee exists to assist Council in the discharge of its oversight responsibilities by overseeing the organizations operations through the monitoring of financial reporting, internal control and enterprise risk management processes.

Committee Outcomes

1. External Auditor

a. The Committee in relation to the appointment of The City’s external auditor will:

i. Approve the selection process and criteria;

ii. Review all materials submitted by applicants;

iii. Approve the short list of candidates;

iv. Participate in interviews of the short listed candidates; and

v. Make recommendations to Council about the appointment and fees payable to the external auditor including the extension or termination of existing contracts.

b. The Committee has the power to approve the external auditor’s work plan and the external auditor’s requests for changes to the annual work plan. The work plan will include the following items:

i. The objective and scope of external audit work;

ii. Materiality limits;

iii. Areas of audit risk;

iv. Audit reports required;

v. Timelines for the work plan; and

vi. The identity and credentials of senior staff performing external audit work.

c. The Committee will review the external auditor’s audit and other reports, post-audit and management letter and will, in particular, address any significant issues or findings on:

i. Financial reporting matters including judgments on estimates, assumptions and clarity of disclosures;

ii. Difficulties or impediments encountered during audits;

iii. Identification and assessment of deficiencies in internal controls;

iv. Selection and application of accounting principles or standards and application of elective principles or methods;

v. Audit limitations;

vi. Response to and status of implementation of audit recommendations and follow up; and

vii. Contingencies that could have a material effect on The City’s financial statements.

d. The Committee will receive for information the external auditor’s annual confirmation regarding the external auditor’s independence.

e. The Committee may request additional information from the external auditor’s about any part of the external auditor’s work plan or reports.

f. Administration will present an annual report to the Audit Committee regarding:

i. Categories of non-audit services the external auditor is permitted to provide to The City; and

ii. The cost and nature of non-audit services the external auditor provides to The City.

g. The Committee is responsible for providing an annual assessment of the work of the External Auditor.

2. Value for Money Audits

a. The Committee will:

i. Recommend to Council the subject for Value for Money Audits based on recommendations from administration;

ii. Approve the purpose and scope of the Value for Money Audit being proposed;

iii. Receive the auditor’s report from administration and forward to Council;

iv. Review and approve administration’s Value for Money implementation plan and refer any recommendations requiring Council approval, such as budget, through the normal budget and Council processes;

v. Receive progress reports from administration at a schedule determined by the Audit Committee.

3. Financial Statements

a. The Committee will annually review the following matters:

i. The completeness and clarity of financial statement reporting;

ii. Estimates and assumptions underlying financial statement reporting;

iii. Financial statement reporting practices;

iv. Compliance with generally accepted accounting standards for the public sector or changes to those standards;

v. Impact of any change in The City’s reporting practices on The City’s financial statements; and

vi. Issues affecting approval of The City’s audited financial statements.

b. The Committee will recommend to Council:

i. That the annual audited financial statements be approved; and/or

ii. That further actions or information that Council may desire in relation to The City’s financial reporting.

4. Enterprise Risk Management

“Enterprise Risk Management” means systems and processes for identifying and managing actual or potential financial risk, strategic risk, operational risk, hazards and other risks to an organization.

The Committee will review reports about The City’s enterprise risk management framework including:

a. The City’s Enterprise Risk Management policies;

b. Processes for identifying and assessing risk;

c. Evaluation of enterprise risk including, but not limited to insurance risk; and

d. Actions taken by Administration to mitigate risks.

5. Internal Controls

“Internal Controls” means systems, processes and procedures developed to:

a. Safeguard assets;

b. Ensure the accuracy of the financial data;

c. Promote operational efficiency; and

d. Promote adherence to policies.

6. The Committee has authority and responsibility to:

a. Review reports from Administration about The City’s internal control systems including technology, security and financial controls and assess whether they are operating effectively;

b. Review reports from Administration regarding The City’s policies and procedures to safeguard The City’s assets and assess whether these policies and procedures are operating effectively; and

c. Report and recommend to Council any actions or decisions regarding The City’s system of Internal Controls.

7. Administrative Compliance

a. The Committee monitors Administration’s compliance with existing policies and legislation.

b. The Committee has authority to review reports regarding the adequacy and effectiveness of corporate policies on fraud, misconduct and policy compliance that deter, detect and prevent fraud and misconduct.

8. Whistleblowing

The Audit Committee is responsible for oversight of the Whistleblowing Program.

9. Planning, Training and Self Evaluation

a. An annual work plan is to be completed by the Audit Committee and endorsed by the February of the calendar year to which the annual work plan applies.

b. Members of the Audit Committee shall have the opportunity to obtain education, either from within The City or from outside educational programs, to ensure their knowledge is sufficient to fulfill their responsibilities as Audit Committee members.

c. On an annual basis, the Audit Committee will conduct a self-evaluation. The self-evaluation criteria are to be established by the Audit Committee.

Membership

1. The Audit Committee will consist of seven members as follows:

a. The Mayor;

b. Three Councillors (two-year terms, staggered);

c. City Manager, as a non-voting member;

d. Director of Corporate Services, as a non-voting member; and

e. Chief Financial Officer, as a non-voting member.

2. The Mayor cannot Chair the Audit Committee.

A quorum of the Audit Committee is two voting members.

Meetings

The Audit Committee meets the third Thursday of every month commencing at 1:30 p.m. as required.

Meeting Agendas & Minutes

All agendas and minutes after April 1, 2014 are available at meeting.reddeer.ca/audit

View Meeting Minutes and Agendas

To view meeting agendas and minutes prior to April 1, 2014, view the Audit Committee - Archives.