Audit and Risk Committee

The Committee's members include:

• Fran Raymond – Committee Chair
• Tony Hof – Member
• Peter Dunlop – Member

Audit and Risk Committee Charter

The Accountable Authority of the Productivity Commission (PC), the PC Chair, has established an Audit and Risk Committee (ARC) in compliance with section 45 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and PGPA Rule section 17 Audit Committees for Commonwealth Entities.

This Charter defines the role, authority, responsibilities and functions of the ARC. It been developed in accordance with the PGPA Act, PGPA Rule, and ‘A guide for non-corporate Commonwealth entities on the role of audit committees’ issued by the Department of Finance in September 2021.

Role

The ARC’s role is to provide independent advice and assurance to the Accountable Authority on the PC’s financial and performance reporting responsibilities, risk oversight and management, and system of internal control.

The ARC is not responsible for the executive management of these functions. The ARC will engage with management in a constructive and professional manner in discharging its advisory responsibilities and formulating its advice to the Accountable Authority.

The ARC will be assisted by the entity’s contracted internal auditors who will deliver an internal audit program in line with the ARC’s guidance and subject to approval by the Head of Office or delegate.

Functions¹

Financial reporting [PGPA Rule 17(2)(a)]

To fulfil its responsibilities in respect of the financial reporting function the ARC will:

Performance reporting [PGPA Rule 17(2)(b)]

To fulfil its responsibilities in respect of the performance reporting function the ARC will review the proposed reporting of the PC’s performance to satisfy itself that:

Systems of risk oversight and management [PGPA Rule 17(2)(c)]

To fulfil its responsibilities in respect of the risk oversight and management function the ARC will:

System of internal control [PGAP Rule 17(2)(d)]

To fulfil its responsibilities in respect of the system of internal function the ARC will review and provide advice to management on their approach to maintaining effective controls in the following areas:

Authority

The ARC has no executive powers, except those expressly provided by Commonwealth legislation or delegated to it by the Accountable Authority. The Accountable Authority authorises the ARC, in accordance with its role and responsibilities, to:

• obtain any information it requires from any official or external party (subject to any legal obligation to protect information)
• discuss any matters with the ANAO, or other external parties (subject to confidentiality considerations)
• request any official, including the Accountable Authority, to attend a ARC meeting
• obtain legal or other professional advice (subject to the approval of the ARC Chair and appropriate financial delegation arrangements), as considered necessary for the proper discharge of its functions and responsibilities.

Membership and responsibilities

The Accountable Authority determines the composition of the ARC and appoints its members. When appointing members, the Accountable Authority will ensure that the collective qualifications, knowledge, skills and experience of the ARC’s members are suitable to enable the ARC to perform its functions in the context of the agency. At least one member will have accounting or related financial management experience with an understanding of accounting and auditing standards in a public sector environment.

ARC members, taken collectively, will have a broad range of skills and experience relevant to the operations of the PC and are expected to understand and observe the legal requirements of the PGPA Act 2013. The ARC will have a majority of independent members, as required by the PGPA Rule. Further, from 1 July 2021, all members of the ARC will be persons who are not officials of the PC; and the majority of members will be persons who are not officials of any Commonwealth entity.

The Accountable Authority, Head of Office, Assistant Commissioner Corporate, Director Finance and Office Services, Director, Digital Technologies (DT), or other management representatives may attend meetings as advisers or observers, as determined by the Chair, but will not be members of the ARC.

A representative(s) of the ANAO will be invited to attend meetings of the ARC, as an observer.

Members will be appointed for an initial period determined by the Accountable Authority and may be re-appointed for additional periods after a formal performance review.

• Members, including the Chair, will ordinarily be appointed for three-year terms, with staggered starting dates to ensure a rotation of members over time, and will generally serve no more than two terms. This helps introduce new skills and new perspectives to the deliberations of the ARC. Shorter-term appointments may be made at the discretion of the Accountable Authority.

The membership of the ARC, and attendance by non-members at ARC meetings, is shown in Attachment A.

Responsibilities of the Audit and Risk Committee Chair

The ARC Chair will:

• ensure the ARC is run effectively and inclusively, in line with an agreed agenda, to deal with the business at hand - having regard to the requirements under the PGPA Act, PGPA Rule, and guidance from the Department of Finance
• help frame the issues for discussion and deliberation, and seek to engage all members in discussions
• ensure decisions and actions arising from meetings are clearly articulated
• ensure that minutes are kept and records maintained (delegated to secretariat)
• provide leadership and determine the culture and behaviour of the ARC
• engage with the Accountable Authority as appropriate on outcomes and decisions from the ARC.

The ARC Chair is accountable for the effective operation of the ARC and any advice provided to the Accountable Authority.

Responsibilities of members

Members of the ARC are expected to:

• understand the ARC’s role and responsibilities, be familiar with the ARC’s relationship with management and the internal and external auditors, as well as have a sound knowledge of the entity’s operations and the environment in which it operates
• contribute the time needed to study and understand the papers provided, apply good analytical skills, objectivity and good judgement; and express opinions frankly, ask questions that go to the fundamental core of the issue and pursue independent lines of enquiry
• bring their own expertise and experience to the ARC to enable completion of activities in an efficient and effective manner
• conduct an annual self-assessment against this Charter and report improvement actions to the Accountable Authority.

ARC members are accountable for assisting the ARC Chair by participating constructively in discussions, providing feedback, proactively identifying issues and proposing solutions for their resolution.

ARC members must not use or disclose information obtained by the ARC except in meeting the ARC’s responsibilities, or unless expressly agreed by the Accountable Authority.

ARC members will be afforded access to all information necessary to enable the ARC to effectively carry out its role. In exercising this access, members must comply with the Privacy Act 1988 and all applicable confidentiality and secure information-handling requirements.

ARC members are entitled to request further information from management as required, including requests for the ARC to engage with agency officials. The ARC will make such requests through the Head of Office.

New ARC members will participate in a formal induction program, including an agreed agenda, a reading pack (incorporating this Charter), and mentoring by the Chair, to support them in fulfilling their responsibilities. Members will also undertake ongoing professional development to maintain relevant skills and knowledge.

Engagement with the ANAO

In undertaking its role, the ARC will engage with the ANAO, as the entity’s external auditor, in relation to the ANAO’s financial statement and performance audit coverage. In particular, the ARC will:

• provide input on planned ANAO financial statement and performance audit coverage
• review entity specific and relevant cross-entity external performance audit reports and monitor management’s response and implementation of audit recommendations
• provide advice to the Accountable Authority on action to be taken on significant issues raised in relevant ANAO reports or better practice guides
• may hold closed sessions at least annually with Internal Audit and with the ANAO and may request pre meeting briefings from management on significant issues.

Sub-committees

If required, the Committee may establish subcommittees with defined scopes and reporting obligations. The Committee will appoint a current member to chair such sub-committees.

The responsibilities, membership and reporting arrangements for each sub-committee shall be documented and approved by the Committee.

Conflicts of interest

Each year, members of the ARC will provide written declarations, through the Chair of the Committee, to the Accountable Authority declaring any material personal interests they may have in relation to their responsibilities. External members should consider past employment, consultancy arrangements and related party issues in making these declarations and the Accountable Authority in consultation with the ARC Chair, should be satisfied that there are sufficient processes in place to manage any real or perceived conflict.

At the beginning of each ARC meeting, members are required to declare any material personal interests that may apply to specific matters on the meeting agenda. Where required by the Chair, the member will be excused from the meeting or from the ARC’s consideration of the relevant agenda item(s). 

The Chair is also responsible for deciding, in consultation with the PC Chair where appropriate, if he/she should excuse themselves from the meeting or from the ARC’s consideration of the relevant agenda item(s). Details of material personal interests declared by the Chair and other members, and actions taken, will be appropriately recorded in the minutes.

Administrative arrangements

Meeting frequency

The ARC will meet at least four times per year. One or more special meetings may be held to review the PC’s annual financial statements and performance statements or to meet other specific responsibilities of the ARC.

The Chair is required to call a meeting if asked to do so by the Accountable Authority and decide if a meeting is required if requested by another member, internal audit or the ANAO.

Annual Work Plan

The ARC will develop a forward meeting schedule that includes the dates, location, and proposed agenda items for each meeting for the forthcoming year, and that covers all the functions outlined in this charter.

Quorum

A quorum will consist of a majority of ARC members (two). The quorum must be in place at all times during the meeting.

Secretariat

Secretariat services will be provided to the ARC as detailed at Attachment A.

Advice format and record retention

Records of the Committee’s activities, including agendas, supporting papers, minutes, formal opinion letters and correspondence, will be accurately prepared and retained by the Secretariat in accordance with the entity’s record-keeping policies, applicable Commonwealth record-keeping requirements, the Archives Act 1983, and section 37 of the Public Governance, Performance and Accountability Act 2013.

Reporting

The ARC will, as often as necessary, and at least once a year, report to the Accountable Authority on its operation and activities during the year and confirm that all functions outlined in this charter have been satisfactorily addressed.

The ARC may, at any time, report to the Accountable Authority any other matter it deems of sufficient importance to do so. In addition, at any time an individual ARC member may request a meeting with the Accountable Authority.

Review of functions

The Chair of the ARC, in consultation with the Accountable Authority, will undertake a review of the performance of the committee at least once every two years. The review will be conducted on a self-assessment basis, with appropriate input sought from Committee members, senior management, internal audit, external auditor, and any other relevant stakeholders.

The Chair of the ARC will provide advice to the Accountable Authority on an external member’s performance where an extension of the member’s tenure is being considered.

The ARC will review this charter every year, or as required, and advise the Accountable Authority of any substantive recommended changes for approval.

Approval Decision Authority

This Charter was approved by the PC Chair on:

[signature]

Signed: Danielle Wood
Chair, Productivity Commission

Date: 3 March 2026

Previous version dated: 6 March 2025

Footnotes

1. PGPA Act Rule section 17 states that the functions of an audit committee must include reviewing the appropriateness of the accountable authority’s: financial reporting; performance reporting; system of risk oversight and management; and system of internal control. As such these functions are mandatory. Locate Footnote 1 above

Attachment A – Audit and Risk Committee Charter

Membership

Attendance at Committee meetings

Any Management Committee member may attend any ARC meeting and will be provided with all relevant papers prior to the meeting.

The Head of Office, the Chief Finance Officer, the Director, Finance and Office Services, and the Director, Digital Technology or their delegates, are expected to attend ARC meetings to assist the Committee in its work.

Attendance at ARC meetings may also include other members of management as necessary, internal auditors, internal audit function staff, and ANAO representative(s).

Secretariat

Secretariat services will be provided by the Corporate Group. The secretariat will ensure the agenda for each meeting is approved by the ARC Chair; the agenda and supporting papers are circulated at least one week before the meeting; and ensure timely minutes of the meetings are prepared and maintained. Minutes must be reviewed by the ARC and circulated in a timely manner to each member and ARC advisers and observers, as appropriate.

Agenda

The meeting agenda and any papers will be emailed to members at least one week before a meeting unless circumstances require a shorter timeframe. The meeting agenda will include details of any conflicts of interest previously declared by ARC members.

The standing agenda will comprise:

Minutes

The secretariat will be responsible for preparing the minutes of each meeting, circulating minutes for review, and maintaining the minutes of each meeting as a complete record in accordance with records management requirements.