1. HM Treasury guidance provides that the Board should ensure that effective arrangements are in place to provide assurance on risk management, governance and internal control. In this respect, the Board should be independently advised by:
• an Audit and Risk Assurance Committee of at least three members. The Chairman of the Committee should be an independent non-executive member of the Board and at least one of the Committee members should have recent and relevant financial experience.
• an internal audit service operating in accordance with Government Internal Audit Standards.
2. The Audit and Risk Assurance Committee is an advisory body with no executive powers. The provision of assurances to the Board should be reviewed by the Audit and Risk Assurance Committee. The Audit and Risk Assurance Committee is more than a processing centre for the range of assurances available in the organisation; rather the Audit and Risk Assurance Committee should constructively challenge:
• assurance providers as to whether the scope of their activity meets the Board and Accounting Officer’s assurance need; and
• the actual assurances to test that they are founded on sufficient reliable evidence and that the conclusions are reasonable in the context of the evidence.
3. This adds to the value and usefulness of assurances by enhancing confidence in their reliability. The Audit and Risk Assurance Committee should also be proactive in commissioning assurance work from appropriate sources if it identifies any significant risk, governance and control issues which are not being subjected to sufficient review, and in seeking assurance that weaknesses identified by reviews that have been conducted are actually remedied.
4. The Horserace Betting Levy Board has resolved to establish a committee of the Board to be known as the Audit and Risk Assurance Committee.
Membership and attendance
5. The Chairman and members of the Audit and Risk Assurance Committee shall be non-executive Board members and shall be appointed by the Board. The Chair should be a Government Appointed Member of the Board other than the Chairman of the Board.
6. Board members who are not members of the Audit and Risk Assurance Committee should have the right of attendance.
7. The Chief Executive in his role as Accounting Officer, the Finance Director and the Senior Finance Manager will normally attend meetings of the Audit and Risk Assurance Committee. The Senior Finance Manager will act as Secretary to the Audit and Risk Assurance Committee and will circulate minutes of meetings of the Audit and Risk Assurance Committee to all members of the Board. Representatives from Internal Audit and External Audit may also routinely attend.
8. The current composition of the Board’s Audit and Risk Assurance Committee is as follows:
a. Chairman, Lord Risby,
b. Member, David Armstrong,
c. Member, Anne Lambert
d. Member, Mike O’Kane.
9. The Audit and Risk Assurance Committee may co-opt additional members for a period not exceeding a year to provide specialist skills, knowledge and experience.
Frequency of meetings
10. The Audit and Risk Assurance Committee should meet at least four times a year according to HM Treasury guidance though, given the size of the Horserace Betting Levy Board, compared to other Government entities), a minimum of three meetings per year is considered sufficient. The Chair of the Audit and Risk Assurance Committee may convene additional meetings, as deemed necessary.
11. A minimum of two members of the Audit and Risk Assurance Committee will be present for the meeting to be deemed quorate.
12. The Audit and Risk Assurance Committee may ask any other officials of the organisation to attend to assist it with its discussions on any particular matter.
13. The Audit and Risk Assurance Committee may ask any or all of those who normally attend but who are not members to withdraw to facilitate open and frank discussion of particular matters.
14. The Board or the Chief Executive may ask the Audit and Risk Assurance Committee to convene further meetings to discuss particular issues on which they want the Committee’s advice.
15. The Internal Auditors and External Auditors will have free and confidential access to the Chair of the Audit and Risk Assurance Committee. The External Auditor may request a meeting if considered necessary.
16. The work of the Audit and Risk Assurance Committee needs to be effectively communicated if it is to be effective. After each meeting of the Audit Committee a report should be prepared for the Board and Chief Executive to:
• summarise the business taken by the Committee, explaining if necessary why that business was regarded as important; and
• offer the views of, and advice from, the Committee on issues which they consider the Board or Chief Executive should be taking action.
17. The Audit and Risk Assurance Committee should also provide an Annual Report, which should summarise the Audit and Risk Assurance Committee’s work for the year past, and present the Audit and Risk Assurance Committee’s opinion about:
• the comprehensiveness of assurances in meeting the Board’s and Chief Executive’s needs;
• the reliability and integrity of these assurances;
• whether the assurance available is sufficient to support the Board and Chief Executive in their decision taking and their accountability obligations;
• the implication of these assurances for the overall management of risk;
• any issues the Audit and Risk Assurance Committee considers pertinent to the Governance Statement and any long term issues the Committee thinks the Board and/or Chief Executive should give attention to;
• financial reporting for the year;
• the quality of both Internal Audit and External Audit and their approach to their responsibilities; and
• the Audit and Risk Assurance Committee’s view of its own effectiveness, including advice on ways in which it considers it needs to be strengthened or developed.
18. The Audit and Risk Assurance Committee is an advisory body with no executive powers. However, it is authorised by the Board to investigate any activity within its terms of reference and to seek any information it requires from the Executive and staff, who are requested to cooperate with the Audit and Risk Assurance Committee in the conduct of its enquiries. Request for work, and reports received, from Internal Audit will be channelled through the Finance Director.
19. The Audit and Risk Assurance Committee is authorised to obtain independent professional advice if it considers this necessary and these advisors may attend the meetings from time to time.
Duties and Responsibilities
20. The Audit and Risk Assurance Committee will advise the Board and Chief Executive on:
a. The Board’s internal and external Financial Statements and Reports to ensure that they are appropriate and reflect best practice and to approve the response to the auditors’ management letter;
b. The appointment of the internal and external auditors and to approve arrangements and scope for both internal and external audits. The Committee will monitor the planned activity and results of both internal and external audit;
c. The annual and long term audit programmes;
d. The effectiveness of the Board’s internal control systems, governance and the Governance Statement;
e. The Board’s strategic and management risk controls in compliance with the HM Treasury’s Code of Practice;
f. The Members’ and Executives’ register of interests and advise of any conflicts;
g. Anti-fraud policies, whistle-blowing processes, and arrangements for special investigations.
h. The Board’s banking and investment arrangements, making appropriate recommendations;
i. Any other matters when requested to do so by the Board.
21. The Audit and Risk Assurance Committee will provide an Annual Report in respect of the matters set out in paragraph 17 above and will report at other times during the year on the discharge of the above duties when required to do so or when appropriate.
22. The Audit and Risk Assurance Committee will also periodically review its own effectiveness and report the results of that review to the Board.