Audit & Risk Committee
Audit & Risk Committee Terms of Reference
The Audit and Risk Committee is a standing Committee of the Board of Governors responsible for assessing recommendations and reports on the finances, financial controls and risk exposures of the University. The Committee’s function includes review of financial reporting, internal controls, safeguarding of the University’s assets and general risk exposure. The Committee monitors the competence with which external and internal audits are conducted, confirms that auditors’ recommendations are given due consideration, and that auditors’ have independence in their relationship with University Administration.
More specifically, the Committee’s primary responsibilities include oversight of:
- the University’s financial reporting processes to confirm the transparency and integrity of financial reports; and
- the University’s Enterprise Risk Management framework, including the internal control and risk management environment, to confirm it meets the needs of the University;
- the effectiveness of the internal and external audit functions; and,
- the lines of communication among the External Auditor, President, Chief Risk Officer, Chief Internal Auditor and the Audit Committee to confirm they support appropriate and timely action in fulfillment of the Committee’s responsibilities.
B. The Committee's areas of responsibility include:
1. Financial Reporting
1.1. External Audit
1.1.1. Review and recommend the appointment of the External Auditor to the Board of Governors, including the related engagement fees.
1.1.2. Review and approve the External Auditor’s Letters of Engagement and Independence and Scope of Services, consistent with the terms of appointment approved by the Board of Governors.
1.1.3. Review a list provided by the External Auditor describing its fees for other audits and non-audit services for the previous fiscal year.
1.1.4. Review and approve the External Auditor’s comprehensive audit plan, scope of the examination, and the nature and level of support to be provided by the internal audit function.
1.1.5. Review the External Auditors’ report upon completion of their audits.
1.1.6. At least once a year, meet privately with the External Auditor.
1.1.7. Monitor the performance of the external audit function.
1.1.8. Review any requests to use the External Auditor`s firm for non-audit work. Non-audit work to be considered for provision by the External Auditor`s firm will not include any situations where the External Auditor`s firm will act in a managerial or strategic function or will involve either a potential conflict or impairment of independence. The Committee shall only permit the External Auditor to perform such non-audit work if the Committee has (a) received confirmation from the External Auditor that, in the External Auditor's view, doing such non-audit work will not place the External Auditor in a conflict nor impair the External Auditor's independence and (b) received similar confirmation from the University’s Senior Administration (i.e., CFO/CRO) that the proposed engagement complies with the related requirements and limitations expressed in these Terms of Reference. Typically, the total expense of non-audit work should not be greater than the expense of the audit work in any given year.
1.1.9. Where permission for non-audit work is required between regularly scheduled meetings of the Committee and time is of the essence, the Chair of the Committee has the delegated authority to complete the necessary review following the procedures of 1.1.8, above, where the proposed non-audit work does not entail a fee in excess of $75,000. The Chair will report the outcome of any such action to the Committee at its first scheduled meeting following such review. Notwithstanding the ability to use delegated authority, the Chair of the Committee may choose to consult with the Committee and/or engage its members in the decision-making on these matters.
1.2. Internal Audit
1.2.1. Review and approve the annual and 5 year Work Plans of the internal audit function as well as reviewing significant findings or recommendations submitted by the Chief Internal Auditor and follow up on resultant action plans.
1.2.2. At least once a year, meet privately with the Chief Internal Auditor to confirm that the function is objective (free of conflicts), has the capacity and capabilities to perform the Work Plans and sufficient organizational authority to facilitate the provision of independent report from management.
1.2.3. Monitor the performance of the internal audit function.
1.3. Financial Statements
1.3.1. Review and recommend the University’s Annual Audited Financial Statements as well as reviewing significant findings or recommendations submitted by the External Auditor.
1.3.2. Review and recommend the University’s Heritage Fund Annual Combined Audited Financial Statements as well as reviewing significant findings or recommendations submitted by the External Auditor.
1.3.3. Review and recommend the University of Guelph-Humber Annual Audited Financial Statements as well as reviewing significant findings or recommendations submitted by the External Auditor.
1.3.4. Review the University’s Annual Audited Pension Plans Statements as well as reviewing significant findings or recommendations submitted by the External Auditor or Pensions Committee.
2. Risk Management
2.1. Review and approve annually, the Enterprise Risk Management framework for the organization, including risk appetite, that confirms that appropriate processes are in place to identify, assess and report on management’s control framework and identify, assess and report on material risks, including actions being taken to address and/or mitigate these risks.
2.2. At least once a year, meet privately with the Chief Risk Officer to confirm that the function is objective (free of conflicts), has the capacity and capabilities to perform the work plans, and sufficient organizational authority to facilitate the provision of complete, accurate and timely reports to the Committee.
2.3. Confirm that material risks are being addressed by the appropriate committee(s) of the Board and collect information from these committees to be able to provide comprehensive reporting to the Board at least annually.
2.4. Receive regular reports from management on areas of significant risk to the University, for example but not limited to legal claims, environmental issues, health, safety, and other regulatory matters.
3.1. Review annually the Committee’s mandate and recommend changes as necessary.
3.2. Perform such functions as may from time to time be assigned to the Committee by the Board of Governors, including special examinations as may be required from time to time, and if appropriate retain special counsel or experts to assist.
- Up to six members appointed by the Board of Governors, who shall normally be members of the Board
- Chair, Board of Governors
- The President attends meetings but is not a member
- The University Secretary or designate of the University Secretary attends all meetings but is not a member
Members shall not simultaneously be members of the Finance Committee.
The Committee may have both a Chair and a Vice-Chair in recognition of the significance of the Committee’s two primary areas of responsibility – Financial Reporting and Risk Management. When a Vice-Chair appointment is made, the role of this individual will be to take leadership for aspects of the Committee’s functions that are undertaken in fulfillment of the Risk Management responsibilities as described in these Terms of Reference.
D. Quorum and Meetings
1. Quorum for the Committee is as provided in General Bylaw 7.9: two-fifths (2/5) of the membership.
2. The Committee will normally meet three times annually and more frequently as necessary.
Effective: Board of Governors, July 1, 1989
Revised: November 21, 1996; September 28, 2000; December 4, 2003; December 14, 2005; April 18, 2007; June 6, 2008; January 13, 2010; October 24, 2012; June 4, 2015; October 16, 2018