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The importance of the audit and risk committee

The importance of the audit and risk committee

The Academy Trust Handbook requires that all Academy Trusts must establish an audit and risk committee. This can either be:

  • A separate committee (mandatory if your Trust has income over £50m), or
  • A committee which includes the role of an audit and risk committee within its terms of reference.

The role of the committee has expanded over recent years in line with the ESFA’s more explicit requirement for all Trusts to have greater oversight over the risks facing the Trust. This includes all risks facing the Trust – not just financial. When considering risk the most logical place to start is your risk register. Some useful tips include

  • Keep it clear and concise
  • Discuss what is deemed to be an ‘acceptable level of risk’
  • Use existing KPIs and link these to your risk register
  • It is useful to benchmark your risk register against other Academy Trusts
  • Completing a risk register and looking at it once a year doesn’t mean you’re managing risks. Managing risk in practice requires continual review, discussion, challenge and subsequent monitoring.
  • Finally, remember that Trusts are already good at managing risk in practice. The key is to ensure your register allows you to demonstrate this too.