Audit and Finance Committee Terms of Reference

Name of Committee: Audit and Finance Committee

Purpose: The Audit and Finance Committee will assist the Board in its fiduciary duties, as well as its administration of financial and business planning. The Audit and Finance Committee will review HRA's financial policy to ensure that they meet the requirements of the organization.

Authority: The Audit and Finance Committee serves as an advisory body to the Board.

Terms of Reference: The Audit and Finance Committee will have the authority to:

Reporting Responsibilities

  • Provide advice to the Board on matters pertaining to its mandate

Budget and Finance

  • Ensure that the organizational and financial integrity of Horse Racing Alberta is maintained
  • Report to the Board whether or not the approved Business Plan of Horse Racing Alberta is effective in guiding the delivery of services of management and administration
  • Advise on key strategic initiatives relative to the business plan
  • Ensure that the Board is made aware of the timing of budget presentation and business plan submissions
  • Ensure that the budget and business plan and the annual report are delivered to the Minister according to the Horse Racing Alberta grant agreement
  • Review annual and multi-year plans and operating budgets and cash flow forecasts
  • Recommend annual budget, to the Board for approval
  • Review the financial impact of new or changed projects and proposals subsequent to the Board’s approval of annual budgets and, where practicable, prior to their presentation to the Board for consideration

Risk, Uncertainty and Financial Reporting

  • Assess the effectiveness of organizational controls and performance indicators, such that Horse Racing Alberta receives “value for money” in terms of the results of its expenditures
  • Identify to the Board and management any potential issues or deficiencies that might impair its financial integrity
  • Acknowledge that it is the responsibility of the Board, in consultation with management, to identify the principal business risks facing HRA, determine the HRA’s tolerance for risk, and recommend risk management policies
  • Discuss significant business and financial reporting risks with the external auditors, including their assessment of management’s related plans, processes and programs
  • Review with management and external auditors, as necessary, significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact
  • Review legal matters, actual or pending, which could significantly impact the financial statements and disclosures
  • Review periodic interim financial reports and forecasts
  • Recommend the annual financial statements to the Board for approval

External Audit

  • Ensure that the Board receives a clear picture as to the acceptability of the processes, controls, and reporting based on input received from the external auditor
  • Assess the responsiveness of the CEO / CFO in responding to the reports and recommendations of the external auditor
  • Review all audit processes and meet with the external auditors on an annual basis
  • Review the external auditors’ proposed audit plan and approach and ensure no unjustified restrictions have been placed on the scope of such plan
  • Annually review the performance of the external auditors
  • Make recommendations to the Board regarding the annual reappointment of the external auditors
  • Assess, at least every five years, whether a formal Request for Proposal process and search for external audit services should be undertaken and make recommendations to the Board
  • Meet separately with the external auditors to discuss any matters that the Committee or auditors believe should be discussed privately
  • Ensure that significant findings and recommendations made by the external auditors are received and discussed on a timely basis

Compliance with Laws, Regulations, and Policies

  • Review the presentation of the financial, legislative, and organizational information and ensure that it is clear to board members
  • Recommend to the Board any policy changes necessary to enhance the fiscal and operational effectiveness of the organization
  • Advise the Board relative to any legal issues that are impending, ongoing, or resolved
  • Oversee all financial and legal issues of Horse Racing Alberta

Internal Control

  • Identify areas of concern that need to be pursued by the CEO and management over the next year in strengthening internal processes and controls
  • Review and obtain reasonable assurance that internal controls, including computer system controls, are operating effectively to produce accurate, appropriate and timely management and financial information. This would include reviewing management's assessment of the internal control environment and reports from the external auditors and third party consultants
  • Review recommendations for internal control improvement for management’s consideration and, as appropriate, implementation and results
  • Discuss with the external auditors any fraud, illegal acts, deficiencies in internal control and other similar issues

Other Responsibilities

  • Annually review the reasonableness of the expenses of the Chairman of the Board and the Chief Executive Officer
  • Perform other financial, audit and risk oversight functions as requested by the Board
  • Periodically review and update the Committee’s Terms of Reference and obtain approval of changes from the Board

Communication with Management

  • Meet with Management to review financial reports, before presentation to the Board.

Membership: The Audit and Finance Committee chair is Gill Hermanns.

Members:

  • Brian Alexander
  • John Brennan
  • John Brennan
  • Blair Corbeil
  • Sharon Steil, CFO, HRA

Chairmanship: The Chair of the Horse Racing Alberta Board will name the Chair of any and all committees, upon approval from the Board.

Membership and Rotation: All committee members will be appointed for a 1 year term. Member terms can be extended on an annual basis.

Resources: The CEO will determine and assign a staff member as the primary advisor to the Committee. If necessary, a recording secretary may also be appointed. The Committee will also be accorded a budget to cover meeting expenses, meals/coffee, photocopying, and other related activities.

Timeframe: The Audit and Finance Committee is a standing committee. The Committee will meet at the call of the Chair of the Committee not less frequently than once every two months and may meet according to a set schedule approved by its members. Such a schedule will be registered with the Executive Assistant to the CEO.

Tenure: The Committee is a standing committee and as such will be deemed to be continuous, subject to having its terms of reference and membership reviewed and renewed by the Board (on the recommendation of the Board Chair) every year.

Reporting: The Audit and Finance Committee will provide its minutes to the Executive Assistant to the CEO within 48 hours of any committee meeting. The Committee will be expected to inform the Board on a regular basis of its activities. This update will include the minutes of the most recent meeting of the Committee and if necessary a verbal update of activities since the last committee meeting.

Budget: The Audit and Finance Committee will have a budget assigned to it on an annual basis. The budget shall be an amount deemed necessary by the Board to cover the expenses of the Committee. Committee members will not have the authority to commit Horse Racing Alberta to the expenditure of any funds, except that which is accorded to the Committee for administrative purposes.

Contact with the Media: Any contact with the media shall be handled by the Chair of the Board.

Public Meetings: Unless otherwise provided for in the Procedural Bylaw of the Board, the meetings of the Committee shall be deemed to be open to other board members, who may attend and ask questions but may not vote. Where the matter deals with an issue which is deemed to be confidential, the Committee may move to go “in-camera” to discuss that matter. An in-camera session of the Committee will be restricted by the Committee to only members of the Committee. The only motions permitted as consequence at that time, shall be the motion to go in-camera and the motion to revert back to a public meeting. Any motion dealing with the matter dealt with in-camera will be made in a committee meeting.