The Committee assists CSIRO and its Board in areas of financial management, risk management, internal control and compliance.
Purpose of the Committee
The purpose of the Committee is to assist CSIRO and its Board in the areas of financial management, risk management, internal control and compliance by monitoring and reporting on the following:
- Financial performance and the financial reporting process, including the annual financial statements.
- The adequacy and operation of the risk identification and assessment framework and the system of assurance from management that identified risks are being effectively managed.
- The appropriateness and effectiveness of systems of internal control, including in the areas of financial management, delegations, management information systems and health, safety and environment.
- The scope of work, performance and independence of CSIRO's internal audit unit and the external auditor (ANAO).
- CSIRO's process for monitoring assuring compliance with laws and regulations, including the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and Rules, Government policy and CSIRO's policies, standards and procedures.
In fulfilling its purpose, the Committee will maintain effective working relationships with CSIRO management and the Internal and External Auditors.
In fulfilling its purpose, the Committee will:
1. Financial Statements
- Review the areas of greatest financial risk and how these are being managed in CSIRO.
- Review significant accounting and reporting issues and their impact on the annual financial statements.
- Review the financial reporting process implemented by management and the annual financial statements to determine whether they are compliant with all relevant requirements, are complete, reflect appropriate accounting standards and principles and contain appropriate disclosures and that accounting policies and PGPA (Financial Reporting) Rule / Finance Secretary Directions are consistently applied.
- Examine the acceptability of, correct accounting treatment for and disclosure of significant transactions which are not part of CSIRO's normal course of business.
- Ensure that any significant adjustments, unadjusted differences, disagreements with management, and critical accounting policies and practices have been discussed with the External Auditor.
- Meet with management and the External Auditor to review the financial statements and the results of the audit.
- Obtain the relevant representations from management as to the preparation of the financial statements.
- On recommendation from the CE/ CFO, inform the Board on the results of the financial statement audit and recommend the signing of the financial statements to the Board for publication in the Annual Report.
- Agree with the Chief Finance Officer focus areas for improvement in financial management and monitor progress.
2. Internal Audit
- Review and endorse the Strategic Internal Audit Plan, including monitoring the status of strategic objectives, goals and actions for the internal audit unit for the duration of the Strategic Internal Audit Plan.
- Endorse the proposed annual Operational Internal Audit Plan for the coming year, ensuring that it is risk focused, and covers any areas warranting specific attention by the Committee and that the Plan makes provision for appropriate co‐ordination with the External Auditor.
- Monitor the current Operational Internal Audit Plan, its scope and progress, including any restrictions on scope of activities, or significant disagreements with management.
- Periodically review the effectiveness, performance, structure and resourcing of the internal audit unit.
- Meet separately with the Executive Manager, Audit to discuss any matters privately, as required.
- Ensure significant findings and recommendations made by the internal audit unit are received and discussed, and agreed actions are implemented in a timely manner.
- Ratifying the appointment and termination of the Executive Manager, Audit.
- Review audit activity reports, complete with management responses to the significant audit issues raised.
3. External Audit
- Review the External Auditor’s proposed financial statements audit scope and audit approach, including materiality, for the current year in the light of CSIRO's circumstances and changes in regulatory and other requirements.
- Review and provide input and feedback on any performance audit coverage proposed or undertaken by the External Auditor.
- Regularly review with the External Auditor any audit problems or difficulties encountered in the normal course of audit work including any restriction on audit scope or access to information.
- Review and discuss significant findings and recommendations made by the External Auditor on a timely basis and require that management responds promptly to recommendations made by the External Auditors.
- Review and provide advice to the Board on actions taken on significant issues raised in other relevant performance audit reports and better practice guides.
- Meet separately with the External Auditor to discuss any matters that the Committee or auditors believe should be discussed privately.
- Review the adequacy and effectiveness of CSIRO's risk framework and related processes, including business continuity planning processes.
- Review the process that underpins the development of the Organisational Risk Profile, review the draft Organisational Risk Profile, and the appropriateness of the controls and risk mitigation strategies management will implement to manage these risks (recognising that the Board will discuss and approve the Organisational Risk Profile).
5. Internal Controls
- Ensure any internal control recommendations made by the internal audit unit and the External Auditor and endorsed by the Committee, have been appropriately addressed by management.
- Evaluate the process CSIRO has in place for assessing the appropriateness, effectiveness and efficiency of, and continuously improving the system of internal controls, particularly those related to areas of significant risk.
- Review the adequacy and effectiveness of CSIRO's health, safety and environment management systems, including the processes for identifying and managing related risks.
- Review the effectiveness of processes for identifying and reporting non‐compliance, including the CSIRO Public Interest Disclosure Scheme, and the results of management's investigation and follow‐up (including disciplinary) action.
- Obtain regular updates from management and the CSIRO General Counsel regarding fraud, compliance matters, disputes and claims that may have a material impact on CSIRO's reputation or financial statements.
- Review the process for the preparation of the annual Compliance Report and recommend the signing of the Compliance Report to the Board.
- Make appropriate enquiries to satisfy itself that the CSIRO Annual Report complies with the PGPA Act and requirements of prescribed Rules and other regulatory requirements.
- Review the findings and recommendations of external reviews of CSIRO relevant to the purpose of the Committee.