Audit committee

Terms of Reference

Approved by Trust Board 28 April 2026.

All Trust Board Committees are responsible for the scrutiny, monitoring and provision of assurance to Trust Board on key issues set out in their terms of reference and/or allocated to them by the Board. Agendas are set to enable Trust Board to receive assurance that scrutiny and monitoring processes are in place to allow the Trust’s strategic objectives to be met and to address and mitigate risk.

The Audit Committee was established in June 2002. The Terms of Reference of the Committee are reviewed annually and, if appropriate, amended to reflect any changes to the Committee’s remit and role, any changes to other committees and revised membership. The Audit Committee is a non-executive committee of the Board and has no executive powers other than those specifically delegated in these terms of reference and, as appropriate, by Trust Board. Committees are expected to conduct their business in accordance with the 7 principles of public life (Nolan principles): selflessness, integrity, objectivity; accountability; openness; honesty; and leadership.

Purpose

The Audit Committee’s prime purpose is to keep an overview of the systems and processes that provide controls assurance and governance within the organisation as described in the Annual Governance Statement on behalf of Trust Board and that these systems and processes used to produce information taken to Trust Board are sound, valid and complete. This includes ensuring independent verification on systems for risk management and scrutiny of the management of finance. On behalf of the Trust Board, it will have an oversight of related risks, providing additional scrutiny of any such risks which are outside the Trust’s Risk Appetite, giving assurance to the Board around the management of such risks.

Membership

Taking guidance from the code of governance for NHS provider trusts (October 2022) and the Department of Health into consideration, neither the Chair of the Trust or the Chief Executive attends this Committee unless invited to do so. The Chair of the Committee is appointed by Trust Board and the Chair of the Committee cannot be the Chair of the Trust. The Chair of the Committee should not be the Deputy Chair or Senior Independent Director.

The Committee is always chaired by a Non-Executive Director of the Trust and the membership consists of a minimum of two other Non-Executive Directors. At least one Non-Executive member of the Committee should have recent and relevant financial experience.

Membership as at 1 April 2026

Chair – Non-Executive Director – Mike Ford

Non-Executive Director – Nat McMillan

Non-Executive Director – Martin Neeson

Attendance

The Director of Finance and Resources is in attendance (as lead Director) at meetings. The Company Secretary also attends meetings. Representatives of internal and external audit are also invited and expected to attend. The local counter fraud specialist is required to attend a minimum of two meetings a year.

The Chair of the Trust, the Chief Executive, other Directors, and relevant officers attend the Audit Committee by invitation. Administrative support is provided by the Personal Assistant to the Director of Finance and Resources.

The accounting officer (Chief Executive) should be invited to attend meetings and should discuss at least annually with the audit committee the process for assurance that supports the governance statement. They should also attend when the committee considers the draft annual governance statement and the annual report and accounts.

Quorum

The quorum will be two Non-Executive Director members. Members are expected to attend all meetings. In the unusual event that the Chair is absent from the meeting, the Committee will agree another Non-Executive Director to take the chair.

Frequency of meetings

The Committee will meet a minimum of four times per year to reflect best practice. The Audit Committee will meet with the External Auditor and Head of Internal Audit in private, on at least one occasion, per year. The Chair of the Committee, External Auditor or Head of Internal Audit may request a meeting if they consider one is necessary. The External Auditor and Head of Internal Audit have the right of direct access to the Audit Committee Chair. There will also be an additional annual meeting to approve the annual report, accounts and Quality Accounts.

It is the responsibility of the Lead Director to ensure items are identified for the Committee’s agenda in line with the Committee’s terms of reference, its work programme agreed at the beginning of each year and the current risks facing the organisation, and to agree these with the Chair of the Committee.

Authority

The Committee is authorised by Trust Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed by Trust Board to co-operate with any request made by the Committee. The Committee is also authorised by Trust Board to obtain external legal or other independent professional advice and to secure the attendance of external bodies or individuals with relevant experience and expertise if it considers this necessary.

Sub-committees

To fulfil its duties and to ensure the Trust complies with its statutory responsibilities and duties, the Committee will receive reports from identified sub-committees.

Health and Safety – (moved across from Quality and Safety Committee 1 April 2022)

Duties

Governance, risk management and internal control

The Committee shall review the establishment and maintenance of effective systems and processes that provide internal control within the organisation. In particular, the Committee will review the adequacy of:
All risk and control related disclosure statements, in particular, the Annual Governance Statement and declarations of compliance with value for money assessments together with any accompanying Head of Internal Audit statement, external audit opinion or other appropriate independent assurances, prior to endorsement by Trust Board.
The underlying assurance processes that indicate the degree of achievement of corporate objectives, the effectiveness of management of principal risks and the appropriateness of the above disclosure statements. This includes assessing the fitness for purpose of the assurance framework including risk appetite and providing assurance that action plans are in place to address significant control issues.
The policies for ensuring compliance with relevant regulatory, legal and code of conduct requirements and any related reporting and self-certiﬁcations, including the NHS Code of Governance and NHS Provider licence
The systems for internal control including the risk management strategy, risk management systems and the risk register.
The policies and procedures for all work related to counter fraud, bribery and corruption as required by the NHSCFA.
The work of other committees whose work can provide relevant assurance regarding the effectiveness of controls and governance arrangements.

In carrying out its work, the Committee will primarily utilise the work of Internal and External Audit; however, it will not be limited to these audit functions. It will also seek reports and assurances from Directors and managers concentrating on the over-arching systems of governance, risk management and internal control, together with indicators of their effectiveness. The Committee will use the Trust’s Assurance Framework to guide its work and that of the audit and assurance functions reporting to it.

The Committee will also review arrangements that allow Trust staff (and other individuals where relevant) to raise, in confidence, concerns about possible improprieties in matters of financial reporting and control, clinical quality, patient safety or other matters. The Committee will ensure that:

Arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action
Ensure safeguards for those who raise concerns are in place and that these safeguards operate effectively
Such processes enable individuals or groups to draw formal attention to practices that are unethical or violate internal or external policies, rules or regulations and to ensure valid concerns are promptly addressed
These processes reassure individuals raising concerns that they will be protected from potential negative repercussions

Internal Audit

The Committee shall consider the appointment of the Internal Auditor (for approval by Trust Board) and ensure there is an effective internal audit function established by management that meets Global Internal Audit Standards in the UK Public Sector, that provides appropriate independent assurance to the Audit Committee, Chief Executive, Chair and Trust Board. This will be achieved by:

Consideration of the provision of the Internal Audit service, the cost of the audit and any questions of resignation or dismissal
Review and approval of the Internal Audit approach, operational plan and more detailed programme of work, ensuring that this is consistent with the audit needs of the organisation as identified in the Assurance Framework
Consideration of the major findings of internal audit work (and management’s response) and ensure co-ordination between internal and external auditors to optimise audit resources
Ensure the Internal Audit function is adequately resourced and has appropriate standing within the organisation.
Annual review of the effectiveness of internal audit

External audit

The Committee shall review the work and findings of the External Auditor appointed by the Members’ Council and consider the implications and management’s responses to its work. This will be achieved by:

Consideration of the appointment and performance of the External Auditor, as far as NHS England rules permit
Discussion and agreement with the External Auditor, before the audit commences, of the nature and scope of the audit as set out in the annual audit plan and ensure co-ordination, as appropriate, with other external auditors in the local health economy
Discussion with the External Auditors of its local evaluation of audit risks and assessment of the Trust and associated impact on the audit fee
Review of External Audit reports, including agreement of the annual audit letter before submission to Trust Board and any work carried on outside of the annual audit plan, together with the appropriateness of management responses
Review of each individual provision of non-audit services by the External Auditor in respect of its effect on the appropriate balance between audit and non-audit services

The Committee will also advise the Members’ Council with regard to the appointment and removal of the Trust’s external auditors and, to inform this advice, carry out a market testing exercise for the appointment of the external auditor at least every five years.

Counter fraud

The committee shall satisfy itself that the organisation has adequate arrangements in place for counter fraud, bribery and corruption that meet NHSCFA’s standards and shall review the outcomes of work in these areas.

With regards to the local counter fraud specialist it will review, approve and monitor counter fraud work plans, receiving regular updates on counter fraud activity, monitor the implementation of action plans and discuss NHSCFA quality assessment reports. In particular:

Consider the appointment of the Trust’s Local Counter Fraud Specialist, the fee and any questions of resignation or dismissal;
Review the proposed work plan of the Trust’s Local Counter Fraud Specialist ensuring that it promotes a pro-active approach to counter fraud measures;
Receive and review the annual report prepared by the Local Counter Fraud Specialist;
Receive update reports on any investigations that are being undertaken
Have a responsibility to refer any suspicions of fraud, bribery and corruption to the NHS Counter Fraud Authority

Management

The committee shall request and review reports, evidence and assurances from directors and managers on the overall arrangements for governance, risk management and internal control.

The committee may also request speciﬁc reports from individual functions within the organisation (for example, compliance reviews or accreditation reports).

Financial reporting

The Committee has responsibility for approving accounting policies. It reviews the Trust annual report and financial statements, in order to make a recommendation to the Chair and Chief Executive on the signing of the accounts and associated documents prior to submission to NHS England, Trust Board and the Members’ Council.

In particular, the Committee shall focus on:

Changes in, and compliance with, accounting policies and practices
Major judgemental areas
Significant adjustments arising from the annual audit
The wording in the annual governance statement and other disclosures relevant to the terms of reference of the Committee
Unadjusted misstatements in the financial statements.
Letters of representations
Explanations of significance variances

Committee members will review the Charitable Funds annual report and accounts, prior to submission to the Charitable Funds Committee.

The Committee also ensures that the systems for, and content of, financial reporting to Trust Board, including those of and for budgetary control, are subject to review so as be assured of the completeness and accuracy of the information provided to Trust Board.

The Committee also:

Reviews proposed changes to the Trust’s Standing Orders, Standing Financial Instructions and Scheme of Delegation before these are laid before Trust Board;
Examines the circumstances associated with each occasion Standing Orders are waived.
Reviews schedules of losses and compensations on behalf of Trust Board.
Reviews the Trust’s approach to Freedom to Speak Up including receiving at least 2 reports every year, one of which should be the annual report, from the lead Freedom to Speak Up Guardian.
Receives the Freedom to Speak Up Strategy and action plan and review in detail relevant performance indicators.
Receives assurance from the Quality and Safety Committee that clinical audit is receiving sufficient oversight.
In line with the Trust Treasury Management Strategy and Policy receives regular updates to on treasury management and interest receivable to provide assurance of appropriate management.
Receives digital system development update reports
Receives cyber security system updates

Other Compliance

To provide assurance that the Trust has effective arrangements for the management of safety and emergency response including through the receipt of assurance reports provided by the Health and Safety TAG.
To provide assurance that the Trust has effective arrangements in place to demonstrate compliance with the accessible information standard (AIS) through the receipt of a bi-annual update report.

Other Assurance Functions

The Audit Committee shall review the findings of other significant assurance functions, both internal and external to the organisation, and consider the implications for the governance of the organisation.

These will include any reviews by the Department of Health and Social Care, arms-length bodies, or regulators/inspectors (e.g. Care Quality Commission and NHS England, NHS Resolution, etc) professional bodies with responsibility for the performance of staff or functions (e.g. Royal Colleges, accreditation bodies, etc.)

In addition, the committee will review the work of other committees within the organisation, whose work can provide relevant assurance to the audit committee’s own areas of responsibility. In particular, this will include any committees covering safety/quality, for which assurance from clinical audit can be assessed, and risk management.

Governance regulatory compliance

The committee shall review the organisation’s reporting on compliance with the NHS Provider Licence, NHS code of governance and the fit and proper person’s test.

The committee shall satisfy itself that the organisation’s policy, systems and processes for the management of conflicts, (including gifts and hospitality and bribery) are effective including receiving reports relating to non-compliance with the policy and procedures relating to conflicts of interest.

Behaviours and Conduct

Trust values

Members will be expected to conduct business in line with the trust values and objectives.

Members of, and those attending, the committee shall behave in accordance with the trust’s constitution, standing orders, and standards of business conduct policy.

Equality and diversity

Members must demonstrably consider the equality and diversity implications of decisions they make.

Relationship with the Members’ Council

To reflect best practice, Trust Board will consult with the Members’ Council annually on the Audit Committee’s terms of reference. At the discretion of the Chair of the Committee and/or the Chair of the Trust, governors may be invited to attend meetings of the Committee to support the Members’ Council in meeting its duty to hold Non-Executive Directors to account for the performance of the Board.

Monitoring

The Committee will monitor its performance both in terms of providing assurance to Trust Board and in terms of ensuring it meets the remit as set out in its terms of reference through agreement of an annual work plan, inclusion in the work plan of any items delegated to the Committee by Trust Board and through the Assurance Framework, monitoring implementation of the annual work plan, assessment of the Committee’s performance through an annual self-assessment, and an evaluation of the Committee’s performance through an annual report to Trust Board.

The Committee will assess, measure and evaluate its impact, both quantitatively and qualitatively, and include the outcome of this in its annual report to Trust Board.

Reporting to Trust Board

Trust Board will receive the minutes of Committee at the Trust Board meeting following the Committee meeting.

The chair of the audit committee shall draw to the attention of the board any issues that require disclosure to the full board or require executive action.

The committee will report to the board at least annually on its work in support of the annual governance statement, speciﬁcally commenting on the:

ﬁtness for purpose of the assurance framework
completeness and ‘embeddedness’ of risk management in the organisation
effectiveness of governance arrangements
appropriateness of the evidence that shows that the organisation is fulfilling regulatory requirements relating to its existence as a functioning business.

This annual report should also describe how the committee has fulfilled its terms of reference and give details of any significant issues that the committee considered in relation to the financial statements and how they were addressed.

An annual committee effectiveness evaluation will be undertaken and reported to the committee and the board.

All Trust Board Committees have a responsibility to ensure they foster and maintain relationships and links between Committees and Trust Board. Each Committee also has a responsibility to ensure action identified and agreed is placed within the organisation either through the Executive Management Team or other internal groups, such as Trust-wide Action Groups.

Secretariat and administration

The committee shall be supported administratively by its secretary. Their duties in this respect will include:

agreement of agendas with the chair and attendees
preparation, collation and circulation of papers in good time
ensuring that those invited to each meeting attend
taking the minutes and helping the chair to prepare reports to the board
keeping a record of matters arising and issues to be carried forward
arranging meetings for the chair: for example, with the internal/ external auditors or local counter fraud specialists
maintaining records of members’ appointments and renewal dates and so on
advising the committee on pertinent issues/ areas of interest/ policy developments
ensuring that action points are taken forward between meetings

Next review due: 1 April 2027

Page last updated on: 28^th May 2026