The role of audit and finance committees

28 March 2017

We ran an online survey in October and November 2016 and have used the findings of this survey to benchmark best practice in the charity sector. Here we take a look at some of the key themes and particularly look at how the independent school responses compare to the charity sector overall.

Why are we here?

Most schools set up committees when the remit of the board becomes too wide for it to be effective or when its workload becomes too onerous. Schools must decide whether they set up separate committees to deal with audit, finance and risk issues or create combined committees for two or three of these areas.

Sub-committees should operate within the set terms of reference laid down by the board. These should serve as a basis to plan meetings, provide a framework to report to the board and help the committee self-evaluate its performance.  A clear understanding by the members of what the committee’s roles and responsibilities are is critical to its success.

The independent school sector scores well on having clear terms of reference for its audit and finance committees. In our survey 100 per cent of sub-committees have a formal terms of reference compared with 87 per cent across the wider sector.

Who should be on the committee?

Diversity must be a key consideration. To effectively carry out their responsibilities, committees should comprise a mix of genders and age groups. This not only promotes a variety of skill sets and viewpoints but also helps to ensure membership reflects the demographics of the charity’s beneficiaries. While there are signs that efforts are being made to recruit younger committee members, there is still some way to go.

In our survey schools reported that across all committees 77 per cent of members is male versus 66 per cent across sector with 100 per cent male dominant committees versus 77 per cent in the wider charity sector. This indicates schools are still behind the sector overall in gender diversity.

Only seven per cent of schools have committee members in the under 35 age group (18 per cent for the sector overall) and 30 per cent in the 35-50 age group (77 per cent).

Download the full independent schools report to find out how committees can extract maximum value within your organisation.