Audit and Risk Committee Charter

On this page

1 Introduction

The Director-General (the Accountable Authority) of the National Archives of Australia (National Archives) established the Audit and Risk Committee (A&RC) in compliance with section 45 the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and section 17 of the Public Governance, Performance and Accountability Rule (PGPA Rule).

Audit Committees play an important role in supporting the governance of non-corporate Commonwealth entities, providing independent advice to accountable authorities, and assisting them to meet their duties and obligations.

2 Functions

Under the PGPA Rule, the Accountable Authority of a Commonwealth entity must determine the functions of the entity's audit committee by written charter (the charter) (subsection 17(1)).

This Charter sets out the National Archives’ A&RC’s functions, responsibilities, objectives, authority, composition and tenure, reporting and administrative arrangements.

The AR&C's functions include providing advice to the Accountable Authority on the following:

  • financial reporting
  • performance reporting
  • systems of risk oversight and management
  • systems of internal control.

2.1 Financial reporting

The A&RC provides advice to the Accountable Authority on:

  • whether the annual financial statements, in the A&RC's view, comply with the PGPA Act, the PGPA Rules, the Accounting Standards and supporting guidance
  • whether additional information (other than financial statements) required by Department of Finance (Finance) for the purpose of preparing the Australian Government consolidated financial statements (including the supplementary reporting package) comply with the PGPA Act, the PGPA Rules, the Accounting Standards and supporting guidance
  • the appropriateness of the National Archives’ financial reporting as a whole, highlighting any specific areas of concern or suggestions for improvement.

The A&RC will review and provide advice on the effectiveness of the National Archives:

  • annual financial statements preparation plan
  • information (other than annual financial statements) requested by Finance in preparing the Australian Government's consolidated financial statements, including the supplementary reporting package
  • processes and systems for preparing financial reporting information
  • financial record keeping
  • processes in place to allow the National Archives to stay informed throughout the year of any changes or additional requirements in relation to financial reporting.

2.2 Performance reporting

The A&RC will provide advice to the Accountable Authority whether, in their view, the National Archives annual performance statements and performance reporting as a whole is appropriate, with reference to any specific areas of concern or suggestions for improvement.

The A&RC will review and provide advice on the effectiveness of the National Archives:

  • systems and procedures for assessing, monitoring and reporting on achievement of its performance. In particular, the A&RC should satisfy itself that:
    • the National Archives' Portfolio Budget Statements (PBS) and corporate plan contain appropriate details of how performance will be measured and assessed
    • the National Archives' approach to measuring its performance throughout the financial year against the performance measures included in its PBS and corporate plan is appropriate and in accordance with the Commonwealth performance framework. This may include reviewing, over time, particular elements of the performance measures.

2.3 Risk oversight and management

The A&RC will provide advice to the Accountable Authority whether, in their view, the National Archives' systems of risk oversight and management as a whole is appropriate, with reference to the Commonwealth Risk Management Policy and any specific areas of concern or suggestions for improvement.

The A&RC will review and provide advice on the effectiveness of the National Archives':

  • enterprise risk management policy framework and the necessary internal controls for the effective identification and management of the National Archives' risks, in keeping with the Commonwealth Risk Management Policy
  • approach to managing the National Archives' key risks—including those associated with individual projects and program implementation and activities
  • process for developing and implementing the National Archives' fraud and corruption control arrangements consistent with the fraud control framework, and satisfy itself that the National Archives' has adequate processes for detecting, capturing and effectively responding to fraud risks
  • articulation of key roles and responsibilities relating to risk management and adherence to them by National Archives' officials.

2.4 Internal control

The A&RC will review and provide advice on the appropriateness of the National Archives':

  • internal control framework
    • reviewing the National Archives’ approach to maintaining an effective internal control framework and whether appropriate processes are in place for assessing compliance with key policies and procedures
    • reviewing whether the National Archives' has in operation relevant policies and procedures—including Accountable Authority instructions.
  • legislative and policy compliance
    • reviewing the effectiveness of systems for monitoring the National Archives' compliance with laws, regulations and associated government policies with which the National Archives' must comply
    • determining whether the National Archives’ has adequately considered legal and compliance risks as part of its enterprise risk management framework, fraud control framework and planning.
  • security compliance
    • reviewing the National Archives' approach to maintaining an effective internal security system (including complying with the Protective Security Policy Framework)
  • internal audit coverage
    • reviewing the proposed internal audit coverage, ensuring that the coverage takes into account the National Archives’ primary risks, and recommending approval of the internal audit work plan by the Accountable Authority or the nominated delegate
    • reviewing all internal audit reports, providing advice to the Accountable Authority on major issues identified in those reports, and recommending action on significant matters raised including identification and dissemination of information on good practice.
  • business continuity:
    • reviewing that an appropriate approach has been taken in establishing business continuity planning arrangements—including whether business continuity and disaster recovery plans have been periodically updated and tested.
  • ethical and lawful conduct:
    • assessing whether the Accountable Authority has taken steps to embed a culture that promotes the proper use and management of public resources and is committed to ethical and lawful conduct.

The A&RC will provide advice to the Accountable Authority whether the National Archives' systems of internal control are appropriate, with reference to any specific areas of concern or suggestions for improvement.

3 Committee membership and structure

3.1 Committee independence

The A&RC is directly accountable to the Accountable Authority and is independent to the executive management of the National Archives' and acts in an objective, impartial manner, free from any actual or perceived conflict of interest.

3.2 Committee membership

The A&RC must consist of at least three independent persons appointed by the Accountable Authority who have appropriate qualifications, knowledge, skills or experience to enable the Committee to perform its functions.

A&RC members are required to collectively possess the expertise necessary to effectively advise the Accountable Authority and have the capacity to understand the business and operating context of the Archives.

All members of the A&RC must not be officials of the National Archives, and a majority of the members must be persons who are not officials of any Commonwealth entity (from 1 July 2021).

A&RC members will be appointed for an initial period of two years unless otherwise determined by the Accountable Authority and may be re-appointed for further periods following a formal review of their performance.

The Chair is appointed for three years but may be extended pending a formal review, to be undertaken at the direction of the Accountable Authority.

Representatives from the ANAO, external auditors and internal auditors cannot be Committee members but may attend meetings as observers.

A&RC members may be rotated to allow for a flow of skills and talent through the committee, enhancing its effectiveness and ensuring its objectivity.

A Deputy Chair may be appointed by the Committee to act as Chair in the Chair's absence. The Deputy Chair must be an independent member and may be approved on a temporary basis, if required.

4 Roles and responsibilities

4.1 Chair

The Chair is appointed by the Accountable Authority and responsibilities include:

  • to engage effectively with the Accountable Authority and seeking their support when required
  • have a strong understanding of the nature of the National Archives' and its work
  • plan and manage committee meetings effectively, enabling the A&RC to perform its functions and meet its responsibilities as outlined in the Charter
  • maintain an open and constructive relationship with senior management, internal audit, other National Archives' committees and the ANAO
  • have a clear understanding of the functions and responsibilities of the A&RC and its position in the National Archives' governance structure
  • be a good communicator who facilitates discussion and focuses on matters of relevance and importance
  • devote enough time to preparing for A&RC meetings and engage with the Accountable Authority, senior management and other stakeholders outside committee meetings as required.

4.2 Secretariat

Secretariat services are provided by Corporate Governance and Risk (CG&R) and responsibilities include:

  • Compiling the agenda in consultation with Director CG&R, Assistant Director General Corporate Services and Chair
  • Circulating the agenda and supporting papers for each meeting, one week prior to meetings
  • Devising a forward meeting schedule prior to the start of each calendar year, in consultation with the committee
  • Taking and distributing minutes
  • Assisting the committee in maintaining communication channels between internal audit and keeping the Accountable Authority informed on the A&RC’s work
  • Making regular submissions to the Executive Board updating the Committee's work
  • Liaising with responsible business areas to ensure audit recommendations are actioned and completed.

5 Conduct of the audit committee

Members of the A&RC are expected to understand and observe the legal requirements of the PGPA Act and Rules. Members are also required to:

  • act in the best interests of the National Archives as a whole
  • apply good analytical skills, objectivity and judgement
  • express opinions constructively and openly, raise issues that relate to the A&RC’s responsibilities and pursue independent lines of inquiry
  • contribute the time required to meet their responsibilities
  • develop and maintain an up-to-date understanding of the National Archives and help the Chair to foster constructive relationships with senior management. This may be done by attendance at senior management meetings to brief senior management on audit committee activities and discuss progress in selected areas—for example, in relation to implementing audit recommendations
  • have input to the internal audit function’s work program and have access to internal audit reports to inform its advice to the Accountable Authority.

5.1 Access to and use of information

A&RC members must not use or disclose information obtained by the A&RC except in meeting its responsibilities, unless agreed by the Accountable Authority.

The Accountable Authority authorises the A&RC, in accordance with its role and responsibilities, to:

  • obtain any information it requires from any official or external party (subject to legal obligation to protect information)
  • discuss any matters with the ANAO, or other external parties (subject to legal obligation to confidentiality considerations)
  • request attendance of any official, including the Accountable Authority, at committee meetings
  • obtain legal or other professional advice, as considered necessary to fulfil its role, at the Archives expense and subject to approval by the Accountable Authority, or delegate.

5.2 Conflicts of interest

To help preserve the independence of the A&RC, members must adhere to the following criteria regarding possible conflicts of interest:

  • once a year provide written declarations via the Chair to the Accountable Authority declaring any actual or potential conflicts of interest in relation to their responsibilities
  • consider their past employment, consultancy arrangements and related party issues when making declarations to the Accountable Authority, who, in consultation with the Chair should be satisfied that there are enough processes to manage any real or perceived conflict
  • declare any conflicts of interest that may apply to specific items on the agenda prior to each

    committee meeting and be excused from meetings or consideration of relevant agenda items if

    considered necessary.

The A&RC, in consultation with the Accountable Authority, will decide if the Chair should be excused from meetings or consideration of relevant agenda items.

Details of potential or actual conflicts of interest declared by members and action taken will be appropriately recorded.

5.3 Reviewing assessing committee performance

It is good practice to regularly review the Committee’s performance and assess its conduct and deliverables against the Charter. The Secretariat, in consultation with the Chair, will review the performance of the Committee at least once a year with the review conducted on a self-assessment basis.

6 Administrative arrangements

6.1 Meetings

The arrangements for meetings are as follows:

  • there will be at least four meetings per year plus one or more special meetings to review the National Archives' annual financial statements and performance statements
  • the Chair is required to call a meeting if requested by the Accountable Authority and may decide if a meeting is required when requested by another member, internal audit or ANAO
  • a quorum will consist of a majority of committee members and must be in place at all times during the meeting
  • representatives from the internal and external auditors, the Assistant Director-General, Corporate Services will attend each meeting, unless requested not to do so by the Committee. In addition, the A&RC may request other employees to attend meetings or participate for certain agenda items
  • committee members will normally meet privately (referred to as the pre-meeting) before each A&RC meeting. Among other things, the pre-meeting provides an opportunity for the committee to review the agenda and identify areas of emerging risk. The internal or external auditors, and/or individual members of staff may be invited to attend the pre-meeting.
  • representatives from the ANAO will be invited to attend the pre-meeting of the annual financial statements meeting.

6.2 Reporting

The A&RC will, preferably after each meeting, but at least once a year, provide the Accountable Authority with a report on its operation and activities during the year including:

  • details of meetings, including the number of meetings held and the number each member attended
  • summary of the National Archives' financial and performance reporting
  • an overall assessment of the National Archives' risk management and systems of internal control.

The A&RC may, at any time, report to the Accountable Authority on matters deemed sufficiently important and an individual committee member may request a meeting with the Accountable Authority.

The Accountable Authority may be invited to attend A&RC meetings to participate in specific discussions or provide strategic briefings to the committee.

6.3 Committee charter

The A&RC will review the appropriateness of this Charter at least annually with the outcomes of the review reported to the Accountable Authority.

6.4 Annual work plan

A forward meeting schedule that includes meeting dates, location and proposed agenda items, will be agreed by the A&RC each year and will cover all the responsibilities as detailed in this Charter.

6.5 Induction

New members will receive a briefing from the Secretariat and an induction pack.

6.6 Sub-committees

The A&RC may approve the establishment of sub-committees to assist it to meet its responsibilities.

Each sub-committee shall:

  • document the responsibilities, membership and reporting arrangements for each sub-committee and be approved by the full committee
  • not assume any management functions or be inappropriately influenced by management.