Terms of Reference: Audit and Risk Committee

This document summarises the full Terms of Reference (ToR) of the HSE Audit & Risk Committee (ARC). It is meant to provide a high-level and easy-to-read version but which should not be taken as a substitute for the formal and more detailed ToR.

The ARC is established and maintained in accordance with Section 40H of the Health Act 2004 as amended by Section 23 of the Health Service Executive (Governance) Act 2019 and subsequent legislation. The Committee works in concert with other Board Committees.

Under legislation, the ARC shall advise the HSE Board and the HSE CEO on financial and related compliance matters.

It also has a number of specified roles identified in legislation including advising on the appropriateness, effectiveness and efficiency of the HSE’s procedures relating to: public procurement; seeking sanction for expenditure and complying with that sanction; the acquisition, holding and disposal of assets; risk management; and internal audits.

With regard to risk management, the ARC will retain overall oversight of the operation, maintenance and development of the risk management framework and underlying risk methodologies. The ARC, having regard to the efficient and effective oversight of risk management processes, may transfer the consideration and oversight of risks, and related management actions, to other committees of the Board.

The Committee’s role extends to the following areas,:

1) Financial matters - Advising the Board and the Chief Executive on financial matters and carrying out related reporting activities

2) Accounting & Reporting Matters - Reviewing the appropriateness of HSE’s accounting policies, annual financial statements, annual report and required corporate governance assurances

3) Internal Controls - Providing oversight to the operation of HSE internal controls and, in particular, advising on the appropriateness, effectiveness and efficiency of the HSE’s procedures relating to public procurement and the acquisition, holding and disposal of assets

4) Internal Audit - Providing oversight and advice in relation to the HSE Internal Audit division

5) Audits - Reviewing the arrangements for, and results of, internal and external audits and management’s response to the recommendations and points arising from same

6) Risk Management - Providing oversight and advice with regard to the operation of the HSE Risk Management framework and related activities

7) Clinical Audits – Providing oversight and advice in relation to HSE Clinical Audits

8) Other functions - Providing oversight and advice relating to anti-fraud policies, oversight of the operation of protected disclosure policies and processes, and arrangements for special investigations; scrutiny of contracts, property dealing and the estates function; oversight of compliance functions. `

The scope of the Committee’s authority extends to:

• the HSE and anything it directly controls;
• as legally and contractually appropriate, all service providers in receipt of HSE funding under section 38 of the Health Act 2004 (as amended) and persons or bodies in receipt of assistance of any type as defined in section 39 of the Health Act 2004 (as amended), and
• public monies held in trust by any of the above.

In addition to its statutory authorities, the Board extends the ARC’s authority to:

• investigate any activity within the Terms of Reference set out in this document;
• seek any information or explanations that it requires from any HSE employee or agency totally or partially funded by the HSE and all employees and agencies funded are directed to cooperate with any request made by the Committee;
• obtain independent legal or other independent professional advice, at the HSE’s expense and in accordance with the HSE’s procurement policy, and secure the attendance of persons with relevant experience and expertise at the ARC meeting, if it considers this necessary; and
• investigate any matter it deems relevant to its scope brought to its attention by whomsoever, including, but not limited to, reports in relation to financial and risk management matters;
• ensure appropriate protocols and policies relating to clinical governance, risk and audit are in place and operating effectively in the context of clinical and patient safety;
• advise on the appropriateness, efficiency, and effectiveness of the HSE’s Clinical Audit function by reviewing and recommending for approval the Clinical Audit activities in the Annual Clinical Audit Plan;
• review and monitor the adequacy of the annual Clinical Audit programme, review the findings and recommendations of clinical audits within the National Centre for Clinical Audit (NCCA) as part of the National Quality and Patient Safety (NQPS) team under the Chief Clinical Officer including audits carried out for the HSE by external providers such as the National Office for Clinical Audit, the Specialty Quality Improvement Programmes in RCPI and the National Perinatal Epidemiology Centre Reports and monitor actions taken by management to resolve any issues identified.

The ARC will be appointed by the Board and will consist of

• not fewer than three members of the HSE Board,
• not fewer than four other persons who, in the opinion of the Board, have the relevant skills and experience to perform the functions of the committee, at least one of whom will hold a professional qualification in accountancy or auditing.

A quorum will consist of three members, one of whom will be a member of the HSE Board and, in the absence of the Chairperson from a meeting of the Committee, an acting chairperson will be selected from amongst the Board members attending.

The ARC members should collectively possess an appropriate range of skills to perform its functions to the required standard. At least one member should have recent, relevant financial experience and other members should have experience in the core areas of the Committee’s scope and an understanding of the public sector environment, in particular the accountability structures, and current public sector reform initiatives.

A member of the ARC will hold office for the period determined by the Board when appointing that person. A member of the ARC may resign from the committee by letter addressed to the Chairperson of the Board or may at any time be removed as a member of the Committee by the Board for stated reasons. Members of the ARC will hold office on such terms and conditions as determined by the Board with the consent of the Minister for Health and the Minister for Public Expenditure and Reform.

Committee members are required to advise the Chairperson of any potential conflicts of interest on appointment and make annual declarations under the Ethics in Public Office Acts. Each member of the Committee should take personal responsibility to declare any potential conflict of interest arising in relation to any items on the agenda for ARC meetings.

The ARC will meet as required, determined at its own discretion, but not less than four times a year (to coincide with key dates in the HSE’s financial reporting cycle).

The agenda for each meeting will be finalised by the Chairperson of the ARC and circulated with all relevant papers by the Secretary to all members of the ARC (and other attendees, as appropriate) 5 working days in advance of each meeting.

The Chief Internal Auditor, the Chief Financial Officer and the Chief Risk Officer will normally be expected to attend meetings, and such other officials from the HSE as the ARC may require will also attend from time to time. The Committee will meet separately with the Chief Internal Auditor at least once a year.

The information requirements of the ARC are outlined in Appendix A.

The ARC will provide its advice to the Board and CEO principally by way of its minutes.

The ARC will communicate with the Board and CEO as appropriate in relation to any significant shortfalls in the control environment, compliance and/or risk management environments that come to the attention of, and are of concern to, the ARC.

In accordance with statute (Section 40I of the Health Act 2004 as amended by Section 25 of the Health Service Executive (Governance) Act 2019), the ARC will send a report in writing at least once a year to the CEO and separately to the Board on financial matters relating to their functions and on the Committee’s activities in the previous year, providing a copy of that report to the Board and to the Minister.

At the end of each year the Committee will also prepare an annual report to the Board on its role and responsibilities, and the actions it has taken to discharge those responsibilities,.

The ARC will review its Terms of Reference annually and report the results of that review to the Board. Any changes recommended will be presented to the Board for approval.

The ARC will undertake an annual self-assessment evaluation of its performance and report the results of that review to the Board.

For each meeting the ARC will be provided 5 working days in advance of meetings with:

1. a report summarising any significant changes to the HSE’s strategic risks and a copy of the Corporate Risk Register (CRR);
2. a progress report from the Chief Internal Auditor summarising:
   • work performed (and a comparison with work planned);
   • key issues emerging from the work of internal audit;
   • management response to audit recommendations;
   • changes to the agreed internal audit plan; and
   • any resourcing issues affecting the delivery of the objectives of internal audit.

1. a progress report (written/verbal) from the external audit representative summarising work done and emerging findings (this may include, where relevant to the organisation, aspects of the wider work carried out by the Comptroller and Auditor General, for example, Value for Money reports and good practice findings);
2. management assurance reports; and
3. reports on the management of major incidents, “near misses”, “need to knows” and lessons learned.

As and when appropriate the Committee will also be provided with:

• proposals for the terms of reference of internal audit / the internal audit charter;
• the internal audit strategy; (Annual Internal Audit Plan)
• the Chief Internal Auditor’s annual opinion and report;
• quality assurance reports on the Internal Audit Division;
• the draft financial statements of the organisation;
• the draft governance statement;
• Statement on Internal Control and the Chairman’s Annual Comprehensive Report to the Minister
• a report on any changes to accounting policies;
• external audit’s management letter;
• a report on any proposals to tender for audit functions, where appropriate;
• a report on co-operation between internal and external audit; and
• the organisation’s risk management strategy
• report on Protected Disclosures