Reporter 30/1/02: REPORTS

REPORTS

Report of the Council on the composition of the Audit Committee

The COUNCIL beg leave to report to the University as follows:

1. The Audit Committee is a standing committee of the Council, established by Ordinance (Statutes and Ordinances, p. 896).

2. The Audit Committee at present consists of eight persons appointed by the Council, of whom at least three must be members of the Council, with provision for not more than two further persons to be co-opted. At least two members of the Committee are to be persons having experience of finance, accounting, or auditing. One of the eight appointed members is to be appointed by the Council as Chairman of the Committee. Membership of the Audit Committee and the Finance Committee are mutually exclusive.

3. The financial memorandum between the HEFCE and institutions (HEFCE document 00/25, June 2000) requires the appointment of an Audit Committee in compliance with the HEFCE's Audit Code of Practice; this mandatory requirement being a condition of grant under the memorandum. The Audit Code itself (HEFCE document 98/28) also gives guidance about Audit Committees.

4. The review report on CAPSA prepared by Professor Shattock (Reporter, pp. 177-205) recommended (Recommendation 12) that the Audit Committee should be reconstituted so that it has a lay chairman and a majority of lay members appointed by the Council for their professional expertise and experience in similar roles in corporate life.

5. The Council accept the recommendation made by Professor Shattock. They are currently consulting within the University about, among other things, the appointment of external members of the University Council, one of whom it is proposed would serve as Chairman of the Audit Committee. Until this consultation process has concluded and any Statutory amendment to permit external membership of the Council has been approved, however, the Chairman must be drawn from among the present membership of the Council, in order to comply with the spirit of the HEFCE requirements.

6. The Council therefore propose that the Audit Committee should be reconstituted to consist of:

(a)	the Chairman who in the interim would be a member of the Council appointed by the Council, and subsequently, following approval of an amended membership of the Council, would be one of the external members of the Council;
(b)	two members of the Council appointed by the Council from among the elected members who are members of the Regent House, that is no executive member of the Council, such as the Vice-Chancellor or a Pro-Vice-Chancellor, and no student member of the Council would be eligible;
(c)	four persons, not being members of the Regent House nor employees of the University (that is, people completely external to the functioning of the University and the Colleges) appointed by the Council with regard to their professional expertise and experience in similar roles in corporate life, including members with experience of finance, accounting, or auditing;
(d)	as at present, not more than two persons co-opted by the Committee, provided that co-option should not be obligatory, but these persons may not be members of the Council.

7. The Council hope that it would be possible for the Audit Committee to be reconstituted on these lines by the beginning of the new financial year (1 August 2002).

8. The Council therefore recommend:

That, with effect from 1 August 2002 (or such other date as shall be approved by Grace), the regulations for the Audit Committee (Statutes and Ordinances, p. 896) be amended as follows:

Regulation 1.

By amending the regulation so as to read:

1. There shall be a standing committee of the Council, called the Audit Committee, which shall consist of:

(a) a member of the Council appointed by the Council to serve as Chairman of the Committee,

(b) two members of the Council appointed by the Council from among its members who are members of the Regent House, provided that neither the Vice-Chancellor, a Pro-Vice-Chancellor, nor the Chairman of a Council of a School shall be eligible to serve,

(c) four persons, not being members of the Regent House or employees of the University, appointed by the Council with regard to their professional expertise and experience in comparable roles in corporate life, including at least two members with experience of finance, accounting, or auditing,

(d) not more than two persons, not being members of the Council, co-opted by the Committee, provided that it shall not be obligatory for the Committee to co-opt any person or persons.

Regulation 2.

By replacing in line one the words 'class (a)' by the words 'classes (a), (b), and (c)'

Regulations 3-5.

By deleting Regulation 3 and renumbering Regulations 4 and 5 as Regulations 3 and 4, respectively.

28 January 2002	ALEC N. BROERS, Vice-Chancellor	IAN LESLIE	G. A. REID
	A. J. BADGER	A. M. LONSDALE	JEREMY SANDERS
	JOHN BOYD	M. D. MACLEOD	M. SCHOFIELD
	PETER GODDARD	JAMES MATHESON	L. TAUB
	GORDON JOHNSON	Z. NORGATE	R. E. THORNTON

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