Audit and Risk Committee - Terms of Reference

AUDIT AND RISK COMMITTEE - TERMS OF REFERENCE

1. The Audit and Risk Committee (ARC) of the NatureScot Board is constituted for the following purposes:

a. to advise the Board, and carry out any functions delegated to it by the Board, in matters of audit, risk management, financial accountability and other aspects of assurance which may arise; and

b. to support and challenge the Accountable Officer in discharging her accountabilities to the Scottish Government in that capacity. 

2. Broadly, the ‘Standing Orders for Meetings of the Board of NatureScot’ apply as appropriate to the meetings of the Committee. However there are some exceptions. These Terms of Reference formally record any specific differences in arrangements compared to NatureScot Board meetings.

Responsibilities

3. The Audit and Risk Committee advises the Board and Accountable Officer on: 

• The strategic processes for risk, control and governance to support the outcomes of the organisation and the Governance Statement;

• The accounting policies, the accounts, and the annual report of the organisation, including the process for review of the accounts, material levels of error identified, and management’s letter of representation to the external auditors;

• Reports by the external auditor on NatureScot’s annual accounts or other matters, including the achievement of value for money;

• The activity of internal audit, including the annual Audit Plan, and compliance with Public Sector Internal Audit Standards; 

• The adequacy of management responses and subsequent actions to internal and external audit activity;

• The development and improvement of NatureScot’s arrangements for the attainment of its objectives and targets;

a. In accordance with any statutory requirements for the use of public funds.

b. Within the delegated authorities laid down by the sponsor department and the public body’s own rules on what matters should be referred to the Board of NatureScot.

c. In a manner maximising best value through ensuring the most economic and effective use of resources available.

• The management of specific risks or assurance issues which either the Accountable Officer, the Head of Internal Audit, the Chair of the Board or the Members of the Committee consider require oversight;

• Proposals for tendering for either internal or external audit services;

• Counter-fraud policies, whistle-blowing processes, Cyber Security and arrangements for investigations.

4. The Committee will also periodically review its own effectiveness and report the results of that review to the Board and Accountable Officer. 

Authority

5. The Committee is an advisory body with no executive powers. However it is authorised by the Board of NatureScot to: approve the annual report and accounts on behalf of the Board of NatureScot; investigate any activity within its terms of reference; and to seek any information it requires from staff who are required to co-operate with the Committee in the conduct of its enquiries. Requests for work and reports will be channelled through the Accountable Officer. The Committee is authorised to obtain independent specialist advice if it considers this necessary.

Membership

6. The number and composition of the membership is approved by the Board of NatureScot.  It comprises at least four non-executive members: the Chair being a NatureScot Board Member and other Members can be either Members of the Board of NatureScot, or independent external Members appointed to achieve an appropriate balance of skills and experience. 

7. The Audit and Risk Committee will be serviced by the Executive Office. The Executive Office will work with staff across NatureScot to provide the necessary information to the ARC.

Reporting

8. The Audit and Risk Committee will report verbally to the Board after each meeting (normally quarterly). The ARC Chair will also provide the Board and Accountable Officer with a written Annual Report, timed to support finalisation of the accounts and the governance statement, summarising its conclusion from the work it has done during the year.

9. At any time during the year, should the ARC Chair wish to discuss any matters of ARC business with the Board then they will seek approval from the NatureScot Board Chair for an item to be included in the agenda of the Board meeting.

Meetings

10.The procedures for meetings are:

• The ARC will meet at least four times a year, two of which will be in person, and where possible be held just prior to Board meeting to enable a timely flow of information between Board and Committee.  The Chair of the Committee may convene additional meetings as and when deemed necessary.

• A minimum of two Members plus the ARC Chair of the Committee will be present for the meeting to be deemed quorate.  In the event of the Chair of the ARC not being available, the NatureScot Chair may appoint a temporary acting Chair.

• The Chair of the Board of NatureScot may, in exceptional circumstances, agree to the co-opting of an additional Board Member onto the ARC to ensure it is quorate for its meetings or to provide a specific skill set to assist Committee business.

• The Accountable Officer, Director of Business Services & Transformation, Head of Finance, Planning and Performance, Head of Internal Audit and the Planning & Performance Manager (Risk) will normally attend ARC meetings, along with other staff as appropriate.  Representatives of external audit will normally attend ARC Meetings, and will have the opportunity at least once a year to meet the Committee in private. The ARC can also meet with the NatureScot Head of Internal Audit in private.

• The Committee may ask any other officials of NatureScot to attend to assist with its discussions on any particular matters. 

• The Committee may ask any or all of those who normally attend but who are not Members to withdraw to facilitate open and frank discussions of particular matters.

• The Board of NatureScot or the Accountable Officer may ask the Committee to convene further meetings to discuss particular issues on which they want the Committee’s advice. 

Openness and Transparency

• Access to the Open session meeting agenda will be available to the public 5 days prior to each meeting via www.nature.scot.  Open Session meeting papers will be available to the public on request. Open session minutes will also be made available to the public on request, once confirmed as true and accurate records by the Chair and Committee members.

• Notice of planned attendance by the public to open session items must be provided 24 hours prior to any ARC meeting by e-mailing [email protected]. Members of the public cannot participate in discussions or decisions of the ARC during the meeting.

Greening and Carbon Management

11. Lower carbon ways of working include less work travel, making better choices of ways to travel, reducing paper use by issuing electronic versions where possible; and participating in recycling of waste. In the interests of reducing its carbon footprint NatureScot will utilise video/telephone conferencing equipment where it is available.

Dignity at work

12. NatureScot is an equal opportunities employer and is committed to treating every member of staff with dignity and respect. The individual and corporate responsibilities outlined in our Dignity at Work Policy extend to Committee members and incorporates duties under the Equality Act 2010.

Review

13. The terms of reference of the Audit and Risk Committee are reviewed every two years. These were last reviewed by the Committee on 06 February 2024, with the changes endorsed by Board on 13 March 2024.

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