Copyright Act, 1978
R 385
Skills Development Act, 1998 (Act No. 97 of 1998)RegulationsStandard Constitution of SETA Regulations10. Audit Committee of SETA |
| (1) | Establishment, composition and accountability of Audit Committee |
| (a) | The Accounting Authority must establish an Audit Committee as an independent committee, which reports to the Accounting Authority. |
| (b) | The Audit Committee must be constituted in terms of section 77 of the PFMA, read with Chapter 9 of the Treasury Regulations made in terms of the PFMA. |
| (c) | The Accounting Authority must compile written Terms of Reference that describe the membership, authority and duties of the Audit Committee. |
| (d) | The Audit Committee must be constituted in terms of the requirements of sound corporate governance and it must operate within that framework. |
| (e) | The chairperson of the Audit Committee must— |
| (i) | be an independent person and may not be the Chairperson; and |
| (ii) | be knowledgeable about the status of the position and must have the requisite financial, business, leadership and communication skills. |
| (f) |
| (i) | The majority of the members of the Audit Committee must be independent persons and must be financially literate. |
| (ii) | One member of the Audit Committee must be nominated by members representing organised employers and one member must be nominated by members representing organised labour. |
| (g) | The Chairperson, the members of the Executive Committee and the Chief Executive Officer may not be members of the Audit Committee but they may attend Audit Committee meetings by invitation, if this is considered necessary by the chairperson of the Audit Committee. |
| (h) | The Audit Committee has explicit authority to investigate any matter within its Terms of Reference, and it must be provided with the required resources to access required information. |
| (i) | The Audit Committee may not perform any management functions or assume any management responsibilities. |
| (j) | The Accounting Authority must periodically review and evaluate the Audit Committee's decisions and effectiveness and must review and confirm the Audit Committee's Terms of Reference on an annual basis. |
| (2) | Functions of Audit Committee |
| (a) | The Audit Committee must perform the functions of an audit committee in terms of the PFMA. |
| (b) | The Audit Committee must monitor and reinforce the effectiveness of both the internal control system and the internal audit function. |
| (c) | The Audit Committee must review and make recommendations in respect of— |
| (i) | the functioning and overall efficiency and effectiveness of the internal control system; |
| (ii) | the functioning of the internal Audit Department; |
| (iii) | the risk areas of the SETA's operations, which are to be covered by the scope of internal and external audits; |
| (iv) | the adequacy, reliability and accuracy of the financial information provided to the Accounting Authority; |
| (v) | the scope and results of the external audit and its cost-effectiveness, as well as the independence and objectivity of the external auditors; |
| (vi) | the cooperation and coordination between the internal and external audit functions, and their cooperation and coordination pertaining to the management of the SETA; |
| (vii) | any accounting or auditing concerns identified through internal and external audits and by the Auditor-General; |
| (viii) | the adequacy and effectiveness of the risk management processes followed and the development, maintenance and enhancement of fraud prevention plans; |
| (ix) | the effectiveness of the system for monitoring compliance with laws, regulations and policies, and the results of management's investigation and follow-up action (including disciplinary action) of any instance of non-compliance; and |
| (x) | the SETA's compliance with relevant legal and regulatory requirements and its Code of Conduct and the action taken to address any violations. |
| (d) | The Audit Committee must review the annual financial statements and establish whether the statements have been prepared in accordance with the PFMA and related Treasury Regulations, including the applicable accounting framework. |
| (e) | The Audit Committee must review and confirm the Internal Audit Department's Charter and the Internal Audit Plan and must review and confirm the resources required to implement such plan. |
| (f) | The Audit Committee must develop a direct, strong and candid relationship with the external auditors and its communication with the external auditors must facilitate independence from the management of the SETA and encourage the external auditors to speak freely, regularly and confidentially with the Audit Committee. |
| (g) | The Audit Committee must draw up a recommendation for the Accounting Authority regarding the appointment and removal of the internal and external auditors. |
| (h) | The Audit Committee must recommend such measures as may be necessary to ensure the reliability, integrity and objectivity of the SETA. |
