2.1 Finance Committee
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Finance Committee exercises governance responsibilities with respect to the University’s financial and business affairs, including monitoring the financial risk and performance of University subsidiaries and commercial ventures and, within delegated authority, acts on behalf of Council on those matters.
Chairperson - an external member of Council, appointed by Council
The Chairperson of Audit Committee
The Chairperson of University Risk Committee
The Chairperson of Investment Management Committee
Up to two other Council members or Council Fellows, at least one of whom is an external member of Council with financial expertise
The President of the Academic Board
One member nominated by the Chairperson, in consultation with the President of UMSU Inc. ("UMSU")
One member nominated by the Chairperson, in consultation with the President of the University of Melbourne Graduate Student Association ("GSA")
Up to three other persons appointed by the Chairperson, taking into account the need for additional expertise.
II. Terms Of Reference
The functions of the Finance Committee are –
- To review and make recommendations to Council on policies, including financial delegations, with respect to the control and management of financial resources, the ownership, management and divestment of assets, including properties, investments, borrowings and management of funds.
- To exercise governance accountabilities in relation to oversight of the identification and management of financial risk, including commercial risk exposures arising from the operations of controlled entities, associated companies*, auxiliary operations and significant business ventures, and as otherwise mandated by the University’s Commercial Activities Guidelines..
- To advise the Vice-Chancellor annually of the amount of resources available for preparation of the operating and capital expenditure budget and to review and recommend to Council the University’s annual (recurrent and capital expenditure) budget and forward estimates for adoption.
- To monitor the University’s financial performance against budget and the performance against plan of the annual infrastructure program.
- To oversee the preparation of the annual Financial Statements of the University and recommend to Council their adoption.
- In relation to matters coming within the University’s Commercial Activities Guidelines:
- To provide advice to Council on policies and procedures for the establishment, management and operation of auxiliary operations, subsidiary entities and other commercial activities of the University;
- To make recommendations on the creation of new entities or participation in significant commercial activities, having satisfied itself that all assessments and measures required under the Guidelines have been completed;
- To monitor the financial performance of these bodies and activities including quarterly and annual reports, business plans, financial statements and auditors’ reports;
- To report annually to Council on any significant issues relating to the performance of subsidiaries, joint ventures or the commercial undertakings;
- To monitor what should be considered as a “commercial activity” for the purposes of the Guidelines, having regard also to the significance of the expenditure to be committed for the purpose, and other relevant factors, as reflected in the Guidelines.
- Subject to the foregoing sub-paragraph, to determine whether the University should enter into a commercial activity on the recommendation of the Vice-Chancellor on advice from the Chief Financial Officer or the Deputy Vice-Chancellor (Research), as the case may be, and report any such decisions to Council; and
- To receive reports from the Chief Financial Officer and the Deputy Vice-Chancellor (Research), as the case may be, on determinations made by them as to what does not constitute a commercial activity for the purposes of the Guidelines, and University entry (or otherwise) into the relevant activity or undertaking on that basis.
- To provide advice to Council on the investment objectives of the University and to monitor the Investment Management Committee in securing performance of these objectives.
- To oversee management of the University’s asset portfolio and exercise governance oversight of major infrastructure projects (ie. Projects in excess of $20million), providing advice on how the planning and implementation of major new initiatives might be enhanced for the long term benefit of the University.
- 9. To review all proposals for University participation in an outside company (whether for commercial purposes or otherwise), including approval of applicable constitutions and amendments thereto, save that the creation of any controlled entities (including approval of any constitution and amendments thereto) or participation in a significant commercial activity (section 8(3)(h) of the University of Melbourne Act 2009) always requires the approval of Council on the recommendation of the Finance Committee and the Vice-Chancellor.
III Sub-Committees and Working Groups
- Where circumstances require, the Finance Committee may authorise a sub-group of its membership to act on its behalf to give effect to urgent matters. The sub-group must include the chairperson, the Vice-Chancellor (or nominee) and at least two other external members of Council who are members of the Committee.
- The Committee may establish such ad hoc working groups as may be required from time to time to facilitate the conduct of its business.
- The Investment Management Committee is a standing sub-committee.
Finance Committee holds delegated authority to:
- Authorise the writing off of bad or doubtful debts.
- Approve on the advice of the Investment Management Committee the asset allocation and related principles for the University’s investment portfolio.
- Approve on the advice of the Investment Management Committee the appointment of funds managers and custodial administration in relation to the stewardship of the University’s investment portfolio.
- Approve recommendations from the Vice-Chancellor for settlement of any claims on infrastructure contracts.
- Authorise levels of charges for University services, agreements with and budgets of outside or self-governing institutions, and the use of accounting (including purchasing) systems generally.
- Approve placement of the University’s insurances.
- Approve in advance, significant acquisitions, divestments and investments, company creations and contractual arrangements proposed by subsidiary companies, providing that any such approvals are to be reported to Council.
- Approve asset acquisitions, disposals and property leasing matters within principles and policy approved by Council.
- Authorise the Chief Financial Officer and the Deputy Vice-Chancellor (Research), as the case may be, to make determinations in respect of matters related to compliance with the University’s Commercial Activities Guidelines and entry (or otherwise) into all transactions related thereto, all such determinations to be reported to the Committee, save that:
- The entry into any commercial activity, University membership of any company, or the entry into any other activity where a financial commitment of $10 million (cash) or more is proposed or may arise over the life of the project, requires the approval of Finance Committee and the Vice-Chancellor (on the recommendation of the Chief Financial Officer or Deputy Vice0Chancellor (Research) as the case may be) and reporting to Council; and
- The creation of any controlled entities (including approval of any constitution and amendments thereto) or participation in a significant commercial activity (section 8(3)(h) of the University of Melbourne Act 2009) always requires the approval of Council on the recommendation of Finance Committee and the Vice-Chancellor.
[amended by Council 21/3/11; amended by Council 9/7/12; ToR 6 & 9, Delegation 9 amended by Council 8/10/12.]