1. Composition

The Audit and Risk Committee (hereinafter ‘the ARC’) is an official committee of the National Council and comprises at least four members, namely:

• one National Council representative, who serves as chair;
• the FEDSAS chief executive; and
• two other, non-executive members appointed by the National Council. 

The national chair and the chief executive shall be entitled to seats on the ARC at all times.

The external auditors and financial manager shall attend the meetings of the ARC by invitation, but are not members.

Committee members serve for a period of three years and are appointed by the National Council.

The minimum requirements for membership are:

• the willingness and ability to make useful contributions;
• integrity, independent judgement and commitment;
• insight into FEDSAS affairs, products and services, and knowledge of the entity’s risks and controls; and
• applicable financial expertise, and knowledge of the latest accounting and reporting standards as well as risk management.

2. Secretariat

The national office will provide secretarial support to the ARC.

3. Purpose and authority

The purpose of the ARC is to review and monitor the risk management regime, financial reporting, audit requirements and internal control principles of FEDSAS to ensure that an effective, ongoing process is in place to identify risks, measure their impact, and proactively manage and monitor them. 

On behalf of the National Council, the ARC has the delegated authority to:

• receive, review and make recommendations to Council on FEDSAS’s budget;
• request from executive management, receive and review reports on FEDSAS’s risk management processes, including internal audit reports, FEDSAS’s risk assessments and profile, and its compliance with laws, regulations and good business practices pertaining to risk and risk management;
• offer observations and recommendations to Council and executive management on improvements to the risk management regime, and request documentation on the implementation of such recommendations; 
• conduct or authorise investigations into any risk management and mitigation matters that may be of concern; 
• meet with FEDSAS’s external auditors separately from executive management to review issues of internal control, accounting or financial statements, and in general, maintain an appropriate relationship with the external auditors; 
• review and inform Council of findings in the external auditors’ management letters, as well as executive management’s response thereto; 
• make recommendations to Council and the annual general meeting (AGM) on the appointment, compensation, supervision and feedback on the work of FEDSAS’s external auditors; 
• review and resolve any disputes between management and the internal or external auditors regarding financial presentation and reporting, as well as other risk management and mitigation measures and systems of FEDSAS; and
• make recommendations for Council approval on identified risks and mitigation measures and all other, related issues. 

4. Roles, duties and responsibilities 

• The ARC shall constitute and meet as prescribed in paragraph 5.
• The ARC shall review, approve or cause to be revised FEDSAS’s processes, systems, tools and formats for budgeting, financial management and reporting to be satisfied that reports on the organisation’s financial position and analyses of risks are accurate, timely and consistent with policies, as well as compliant with good governance and reporting practices. 
• The ARC shall review and approve or cause to be revised the job description (charter), annual work plan, all reports, findings and recommendations of FEDSAS’s internal auditor, or otherwise satisfy itself that the organisation’s risk management regime is appropriate and adequate to: 
  • identify, monitor and mitigate all existing and emerging risks; 
  • enable FEDSAS at all times to accurately document and meet any and all financial liabilities to internal and external parties (including loans to or from external or related parties, etc.);
  • adequately value and insure FEDSAS’s assets against all reasonably insurable risks; and
  • present accurate, timely and reliable information and data generated by executive management. 
• At least once a year, the ARC shall formally review FEDSAS’s internal controls, compliance and risk management regime for adequacy and appropriateness, including all asset insurances, fixed asset registries (valuation and depreciation), systems for loan management and custody of collateral and securities (liens and collateral offered to lenders or held for loans, etc.), and taxation compliance (VAT, tax exemptions, and other national taxation requirements).
• The ARC shall review the quality of work of FEDSAS’s internal auditor as and when such position is established, and shall make recommendations on the appointment, training and dismissal of the internal auditor. 
• The ARC may also set aside time during meetings for interaction with the internal auditor without executive management present, to ensure that any information that may be of material importance is disclosed in a timely and accurate fashion, whether internally or more broadly.
• The ARC shall monitor executive management’s implementation of recommendations relating to FEDSAS’s internal controls and risk management regime, and report on progress to Council, with recommendations to improve or revise any measures taken or not taken, as the case may be.
• The ARC shall maintain a professional relationship with FEDSAS’s external auditors, which may include meeting with the external auditors without executive management present, to ensure that any information of material importance is disclosed in a timely and accurate fashion. 
• The ARC shall review the budget, financial statements and annual integrated report as well as the findings, recommendations and management letters of the external auditors in detail and recommend their approval or revision to Council, before assisting Council in finalising its annual integrated report.
• The ARC shall assist the chair of Council with all necessary documentation to ensure that information on the membership and charter of the ARC as well as compliance with the charter is included in Council’s annual report. 
• The ARC shall annually review and report to Council on their dealings with the external auditors, including the ARC’s assessment of the external auditors’ work quality and independence. The ARC shall make recommendations to Council on the appointment, dismissal and remuneration of FEDSAS’s external auditors prior to each AGM. Council shall take the ARC’s recommendations into account in recommending the appointment of external auditors to the AGM. 
• The ARC chair shall attend each FEDSAS AGM to answer any relevant questions. 
• At least once every three years, the ARC shall conduct a thorough assessment of the functioning of the external auditors in their various capacities. The main conclusions of this assessment shall be communicated to the AGM to enable an informed decision regarding the appointment of external auditors. 
• The ARC shall promptly inform Council of all actions that it has taken and major developments of which it becomes aware. For each Council meeting, the ARC shall present a report describing the committee’s actions, findings and recommendations, if any.

5. Meetings

ARC meetings shall be convened by the chair.

The ARC shall meet as required, although at least twice a year before National Council meetings.

Except in extraordinary and urgent circumstances, notices of meetings containing the date, time and venue as well as the agenda items of the meeting shall be provided to all ARC members at least four (4) days prior to meetings.

Meetings are considered quorate if attended by at least 50% of members, plus one.

6. Meeting procedure

The procedure for ARC meetings shall be determined by the ARC itself and shall otherwise be in accordance with the FEDSAS constitution and normal meeting procedures.

The ARC secretary shall minute all proceedings. With the approval of the ARC chair, any National Council member shall be entitled to a copy of such minutes.

All minutes of the ARC shall be submitted to the National Council.

7. General

In performing its duties in terms of this charter, the ARC shall be entitled to obtain such professional or other external advice as it may deem necessary.

The National Council shall see to it that the ARC has access to professional advice from both within and outside FEDSAS to enable the ARC to perform its duties.

The National Council may, at its discretion, amend this charter from time to time.

This charter was approved by the National Council on March 2023. ­­­­­