Audit Committee Report to Council 08/10/04

Audit Committee Report - Friday 8 October

Meeting took place at 7:00 PM by teleconference.

Present: Michael Sutton, Chris Streatfield (Chair), Absent (with belated apologies) Nick Wallingford.

Very short agenda:

Composition of the Committee
Terms of Reference status and/or confirmation for the coming year
Other business

Brief discussion took place around the relationship of InternetNZ and its subsidiary, NZRS. Michael sort clarification as to whether INZ would/should have oversight responsibilities with reference to an Audit Committee role. It was noted that INZ is not operating in a holding company role but as a shareholder and as such does not have any role to play in this capacity.

Meeting started at 7:10.

Composition of the Committee

The proposed composition of the Committee was David Harris, Nick Wallingford, Michael Sutton and the Treasurer (as Chair). This matter has been raised due to David Harris declining to sit on the Committee for the coming year. As such it has been necessary to raise the question of whether a new person should be sought to sit on the Committee. The Terms of Reference of the Committee require that there be a minimum of two Councillors in addition to the Treasurer to sit on the Committee. A couple of names were raised in this connection. A secondary matter concerning positions in the Committee was raised, concerning particularly the position of Deputy Chair. It was pointed out that this Committee, along with Executive Committee, are the only Committees where the Chairperson is pre-determined by the elected position held, Treasurer for this Committee and President for the Executive Committee. Unlike other Committees the role that can be occupied by a Deputy Chair is not so much one of possible grooming to take over the Chair position but only to sit in in cases of emergency where the Chair is unable to attend a meeting. In the event that the Chair departs, for whatever reason, the position will be be re-filled by the next elected Treasurer.

Committee's Terms of Reference.

These were circulated prior to the meeting and it has been agreed to present the same ToR for the coming year, unmodified, apart from deleting the references to the "Admin/Executive Committee" and replacing with only "Executive Committee".

Other Business

Michael raised a couple of issues for the Committee to examine and /or add to the agenda for future meetings:

Recommendations:

That this report be accepted
That the Composition of the Committee at this time be confirmed as:
Treasurer, Chair; Michael Sutton; Nick Wallingford.
That the Terms of Reference below be confirmed for the coming year.

Audit Committee Terms of Reference

Purpose:

Oversight of the soundness of the Society's systems of internal controls regarding finance and accounting compliance, independent auditors, and the soundness of the Society's ethical compliance.

Functions:

The Audit Committee may from time-to-time undertake internal audit investigations. The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it shall have direct access to the accountants, independent auditors and anyone in the Society.

It is the opinion of this Committee that it is inappropriate to have, as ex-officio Members, the President of the Society and the Executive Director.

Meetings:

Regular meetings shall be scheduled in advance for the forthcoming year and the schedule published. The Committee will meet at least three times during the year. Other meetings may be scheduled as a result of situations requiring the input or oversight of the Committee. The Audit Committee is to meet in separate executive sessions with the Society's Executive Director and its independent auditors at least once each year and at other times when considered appropriate. Once scheduled, a meeting date or location may be altered or cancelled only for sufficient cause by majority vote at a regularly constituted meeting of the Committee not less than 10 days before the original date or the new date set for the meeting, whichever is earlier. Notice of such approved change shall be mailed to all members of the Committee and notified to the Office of the Society not less than seven days before the original or the new date of the scheduled meeting, whichever is earlier. In addition, the Committee may also meet by teleconference or other electronic form. Any papers to be brought before the meeting will be circulated 7 days prior to the meeting.

Observers:

The Audit Committee may permit Members of Council to attend meetings as Observers. Requests to attend the meetings in an Observer capacity should be directed to the Chair of the Committee at least 48 hours prior to the meeting taking place. Some matters may require discussion in-camera to which outside parties will not be permitted to attend.

Budget:

The Committee can expend its authorised budget but all such expenditures must be notified and justified to the Office of the Society. No expenditures in excess of the authorised budget will be permitted without the prior authorisation of the Admin/Executive Committee.

Committee Reports:

Committee Reports will be structured and include the agenda discussed, Committee Members in attendance, time and place of the meeting. When items discussed at the meeting give rise to recommendations to Council, the recommendations will be included at the end of the report and highlighted for easy reference. Due to the specific nature of this Committee there may on occasion be detailed reports from the Committee that are sent only to the Admin/Executive Committee. In such situations an edited version of the report will be agreed by all parties and be forwarded to Council.

Membership:

The Audit Committee shall consist of the Treasurer as Chair and a minimum of two Councillors who shall be confirmed by the Council.

Responsibilities and Process:

In performing its oversight responsibilities, the Audit Committee shall:

Review and assess the adequacy of this ToR annually and recommend any proposed changes to the Council for approval
Review the scope of the independent auditors' audit examination and the related fees
Review the independent audit results, including any material comments and recommendations on internal controls or accounting matters by the Society's independent auditors and the Society's responses thereto
Establish regular reporting to the Audit Committee by the accountants and independent auditors regarding any significant difficulties encountered during the course of their review or audit, including any restrictions on the scope of work or access to required information
Review with management and the external accountants the adequacy and effectiveness of the Society's accounting and financial controls, documented procedures and the integrity of its financial reporting processes
Review with management, the accountants and the independent auditors the Society's annual financial statements prior to filing
Review and approve, in advance, significant non-audit services to be performed by the independent auditors and the related fees
Review when necessary, with the Society's general counsel, any legal matter that could have a significant impact on the Society's financial statements.

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