Finance, Audit and Risk Committee

Finance, Audit and Risk Committee 

Terms of Reference 

1. Purpose

The Finance, Audit and Risk Committee (the ‘Committee’) is a Committee of the Board.  It is accountable to the Board and will operate within the framework of relevant governance policies established by the Board. It supports the Board in fulfilling its oversight responsibilities with respect to the organisation’s financial management, risk management and internal controls. The Committee will seek appropriate assurances that ARB is adhering to appropriate governance practices, complying with applicable legislative and regulatory requirements, and is effectively managing its financial and operational risks.

2. Duties

The Committee will: 

Financial Management 

2.1 Receive annually, the organisation’s three-year financial plan and one year budget, and seek appropriate assurance that ARB can sustain and develop its activities to fulfil its statutory obligations and strategy 

2.2 Review and make recommendations to the Board regarding the organisation’s financial policies including authorisation limits, reserves and liquidity to ensure they are fit for purpose 

2.3 Review the organisation’s draft annual report and financial statements and ensure that they are prepared in accordance with legal and regulatory requirements, and provide recommendations to the Board 

2.4 Appoint, reappoint or remove the organisation’s investment broker 

2.5 Review financial performance including management accounts, forecasts, draft budgets, KPIs and cashflow statements, seek appropriate assurances regarding the integrity of the financial information provided and seek assurance that appropriate actions are taken to respond to any deviations from the financial plan that the Board has approved 

2.6 Receive reports and provide advice to maximise returns on cash surpluses and investments, and seek appropriate assurance that these operate within the framework of ARB’s risk appetite and strategy 

2.7 Seek appropriate assurance that the organisation is maintaining a system of robust financial controls to safeguard the assets of ARB. 

Risk Management 

2.8 Review and advise the Board on ARB’s risk management framework to ensure effective risk mitigation strategies are in place and provide regular advice and recommendations to the Board regarding relevant updates that are needed to the framework 

2.9 Identify and assess the organisation’s significant financial and operational risks, including regulatory, reputational and strategic risks 

2.10 Review reports from internal and external auditors regarding risk management activities and make recommendations to the Board 

Internal Audit 

2.11 Appoint, reappoint or remove the internal auditors  

2.12 Oversee the internal audit process, including approving the annual internal audit plan and seeking assurance that there are sufficient resources available to support internal audit 

2.13 Seek appropriate assurance regarding the independence and effectiveness of the internal audit function 

2.14 Review the internal auditor’s reports on controls, processes and compliance with relevant laws and regulations 

2.15 Seek appropriate assurance that the organisation acts on audit findings and implements appropriate actions 

External Audit 

2.16 Make recommendations to the Board regarding the appointment of external auditors and review their performance and independence 

2.17 Review the external auditor’s scope of work and effectiveness of the external audit process 

2.18 Oversee the external audit process and review the auditor’s findings 

Compliance and Governance 

2.19 Seek appropriate assurance that all legal and regulatory requirements relating to financial, risk and audit matters are complied with 

2.20 Review and provide advice to the Board regarding financial reporting, audit and risk management policies, ensuring they align with best practice 

2.21 Report to the Board on any material findings or concerns relating to financial and operational performance, risk management and controls 

3. Authority 

3.1 The Board and ARB’s Accounting Officer authorise the Committee to test, and investigate where appropriate, any activity within its terms of reference and to access any records, staff and physical properties deemed necessary to assist the Committee to carry out its duties. 

3.2 The Committee can where necessary, and where costs are reasonable, decide to obtain, in consultation with ARB’s Accounting Officer and/or the Board Chair, external professional advice on any particular issue. 

3.3 The Chair of the Committee shall, where necessary, have confidential access to the ARB Accounting Officer and/or the Director of Performance and Planning/Head of Finance.  

3.4 The Committee can recommend actions to the Board on matters related to finance, risk and audit as appropriate and based on its assessments. 

4. Membership 

4.1 The members of the Committee shall be appointed by the Board and shall consist of: 

• Two lay and two architect Board members, one of which will be appointed as the Chair of the Committee   

• Up to two additional external member/s to supplement the Committee’s skills base and provide an additional independent advice and challenge. 

4. 2 The Chair of the Committee will be a Board member and should have financial and/or audit qualifications, or other significant relevant recent experience. Where the Chair does not hold financial or audit qualifications, another member of the Committee must do so. 

4.3 Other regular attendees of the Committee should include the CEO & Registrar, relevant members of the Senior Leadership Group, and staff members responsible for finance, risk and governance. 

4.4 The Committee may ask any other member of staff, or such others as may be appropriate, to attend to assist it with its discussions on any particular matter. 

5. Quorum 

5.1 The quorum of the Committee shall be three members of the Committee if the Committee consists of five members. The quorum shall be four members of the Committee if the Committee consists of six members. 

 5.2 In the event that the Chair has any direct and significant conflicts of interest or is unavoidably absent for any item, the Committee may ask one of the lay members to stand in as Chair for the relevant items. 

6. Meetings and Procedures 

6.1 The Committee will normally have four scheduled meetings per year.  These should align with key points in the financial and governance calendar. Additional meetings can be called by the Chair of the Committee at any time, giving at least 14 days notice. 

6.2 Meetings will typically be held online. At least one meeting per year will be held in person.  Meetings will be held in confidential session in line with the Board’s policy. 

6.3 The External Auditors will have access to the Chief Executive Officer & Registrar, Chair of the Board and the Chair of the Committee as necessary. 

6.4 The Internal Auditors and/or External Auditors will normally be invited to meet with the Committee in private as well as attend for items where required as part of the agenda. 

6.5 External auditors or internal auditors may raise any issues directly with the Chair of the Finance, Audit and Risk Committee, or request a meeting with the Committee, at any time. 

7. Reporting Requirements 

7.1 A draft of the minutes will normally be circulated to the Chair of the Committee for initial approval within five working days of a meeting taking place.  The Chair will normally approve the draft minutes within a further five working days following receipt of the draft minutes. The Chair-approved minutes will then be circulated to members of the Committee (and any attendees as appropriate) as a draft immediately after they have been approved by the Chair. The minutes will be presented at the next Committee meeting for formal approval.  The Committee-approved, Chair-approved, or in exceptional circumstances, the unapproved, minutes will be presented for noting at the next Board meeting. In all cases, the status of the minutes will be made clear to the Board. 

7.2 The Chair of the Committee will provide and present an annual report on the Committee’s work to the Board.  Relevant information will also be included in the organisation’s Annual Report and Financial Statements as appropriate. 

7.3 The Chair of the Committee, or nominated alternate, will attend the Sponsoring Government Department’s forum of Audit and Risk Assurance Committee Chairs. 

8. Papers and Agendas 

8.1 The Executive shall circulate an agenda and papers no less than five working days before each meeting. Late papers may be circulated with the agreement of the Chair. Where the Chair agrees that late papers can be circulated, these will be provided as soon as possible and the Registrar shall provide reasons in writing to the Committee. 

9. Declarations and Conflicts of Interest 

9.1 Declarations of Interest must be made in line with ARB’s Declarations and Conflicts of Interest Policy. Any member or attendee of the Committee who becomes aware of a potential conflict of interest, relating to matters being discussed by the Committee, must give immediate notification of that interest to the Governance Team if they become aware of it prior to the meeting; or must declare the interest at the meeting if they become aware of it once the meeting has commenced.  

Approved by ARB Board on 21 May 2025 

Effective from 1 July 2025