CAB - Terms of reference
In 2014, as part of the GRO project, NERC commissioned Deloitte to advise on the future NERC Head Office / centre relationship. Their report, which was accepted by Council in July 2014, articulated the separate roles of NERC and the research centres, and that the fulfilment of these roles required a long term 'value managed' relationship.
NERC and the other research councils operate a funding assurance regime in respect of higher education institutions (HEIs) to fulfil NERC's obligations under Managing Public Money: 'Public sector organisations providing funds to others to acquire or develop assets should take steps to make sure that public sector funds are used for the intended purposes for which the grant is made'.
The report was clear that NERC's relationship with independent research centres goes beyond that with HEIs it funds. National Capability commissioning is long-term, large scale, and non-competitive. The long term interdependent relationship with the research centres therefore requires a greater level of assurance. In that context, NERC's Audit & Risk Assurance Committee have considered the likely scope of an assurance framework. That scope used to define the scope of the proposed assurance boards.
While the evolving assurance framework originates within the context of consideration of the relationship with independent research centres, a stronger version of it can also be used to provide the greater level of assurance to the NERC accounting officer which is required in the current situation of in-house research centres.
These terms of reference (ToRs) described an assurance board as a governance mechanism to test the delivery of the required assurance. In July 2016 NERC Council agreed to introduce these arrangements within the current circumstances of 'in house' research centres, to fulfil current requirements and to better enable evolution to whatever new ownership and governance is agreed by the Department for Business, Energy & Industrial Strategy (BEIS).
Centre Assurance Boards (CABs) are established for:
- British Antarctic Survey (BAS)
- NERC Centre for Atmospheric Sciences (NCAS)
- NERC Centre for Earth Observation (NCEO)
The following do not require a CAB as assurance can be managed through the Funding Assurance Programme (due to lower level of funding):
- Scottish Association for Marine Science (SAMS)
- Plymouth Marine Laboratory (PML)
- Sea Mammal Research Unit (SMRU)
- Sir Alister Hardy Foundation for Ocean Survey (SAHFOS)
- Marine Biological Association UK (MBA)
The purpose of the CABs are to provide assurance to the NERC Executive Chair that neither party is exposed to unacceptable or unknown risk and legal obligations and obligations which flow from Managing Public Money are being fulfilled. The CAB will operate the Centre Assurance Framework that will be a condition of funding for each centre.
The CAB provides a forum to review the comprehensiveness and reliability of assurances on governance, risk management, the control environment and financial statements. The scope of the CABs should encompass all the assurance needs of the NERC Chief Executive.
The CAB will assure the NERC Executive Chair:
- That the organisation is well run.
- That the centre is financially stable and viable so that national capability delivery is secure.
- That there is compliance with statutory and non-statutory requirements.
- That NERC funded capital projects are on track to delivery intended benefits, in line with the parameters of the business case.
The CAB scope covers the following areas (adapted as necessary for individual centres):
- centre governance
- reviewing centre plans for areas in scope
- risk management
- funding assurance
- research integrity
- business continuity planning arrangements
- periodic review of National Capability (NC) monitoring and reporting
- financial performance, stability and viability
- delivery of NERC funded capital projects including benefits realisation
- people / HR
- EU procurement directives and regulations
- estates management
- implementation of key policies such as whistle blowing, fraud and bribery, corporate governance, reputation management, gifts and hospitality (not applicable for NCEO and NCAS)
- audits and inspections (not applicable for NCEO and NCAS)
- health & safety policy and reporting (see health and safety section below) (not applicable for NCEO and NCAS)
- information security and records management
- partition and non-partition (BAS only).
Membership and ways of working
The CAB is comprised of the following:
- Each CAB will be chaired by the NERC Chief Operating Officer (COO).
- Membership for each CAB will comprise of the NERC Executive Chair, the NERC COO, the relevant centre director and appropriate senior managers, the NERC Director, Research & Innovation (as appropriate) NERC Finance Director, NERC Associate Director, HR (as appropriate), the NERC Director of Major Projects.
The CAB operates in the following ways:
- CAB meetings will be held for each centre on a six-monthly basis and will absorb the Centre Action & Resources Plan (CARP) process. These meetings will be chaired by the COO. BAS will also have two portfolio meetings per year, chaired by the COO. The first meeting will be a light touch CARP meeting with the second meeting being more CARP focused to meet BEIS requirements. Additional meetings may be convened, as deemed necessary.
- A minimum of three members of the CAB (two of whom have to be the chair and the relevant centre director) will be present for the meeting to be deemed quorate.
- Conflicts of interest will be declared, according to NERC practice, although the nature of CAB business is unlikely to require members to leave the room.
- CAB will formally report to the NERC Executive Chair and will provide regular reports to the NERC Management Board (NMB).
- CAB may ask any other officials of the organisations to attend to assist it with its discussions on any particular matter.
- CABs will incorporate the Centre Action & Resource Plan (CARP) process.
- The CABs will be subject to an effectiveness review on a regular basis.
- The work of the CABs may be scrutinised by the Government Internal Audit Agency (GIAA).
- The CABs will be supported by a secretariat.
- The CAB chair will be responsible for agreeing the agendas (per meeting and rolling agenda), minutes and a summary of the meeting.
- Centres must ensure that their executive boards approve all documentation ahead of being submitted to a CAB meeting.
Health and Safety
CABs will provide information on their centre's health and safety performance and provide the discussion / explanations / challenges that are reported to NMB by the Executive Chair or COO to enable NMB to form an opinion, discuss the matter and make decisions. There will also need to be a feedback loop between the NMB and CABs on local or cross NERC health and safety matters.
NCAS and NCEO do not form part of NERC's legal entity so their CABs will not need to consider their health and safety except in respect of the operation of the Facility for Airborne Atmospheric Measurements (FAAM). At 'in-house' research centre CABs, centre directors will have to present information, statistics and relevant details on their overall health and safety performance including:
- reportable occurrences
- legal non-conformities
- enforcement visits and actions
- serious or potentially serious accidents, incidents and near misses
- statistics (such as numbers of accidents, incidents, near misses, training courses, inspections / audits etc.)
- other important safety issues, including details of BS OHSAS 18001 / ISO 45001 matters
- actions taken or proposed to deal with internal centre safety matters
- feedback and discussion on cross-centre health and safety issues and actions required by NMB and / or the Executive Chair.