PREAMBLE

Law of Botswana and African Union Sports Council Region 5 (AUSC Region 5) Constitution

These provisions are complementary to the law of the territory of the republic of Botswana and requirements regarding the AUSC Region 5 Secretariat and Staff members in AUSC Region 5 Constitution and the provisions governing the relationship between the Commissions and the Secretariat as contained in the Terms of Reference of the Commissions (which have been adopted by the Secretariat).

COMPOSITION OF THE SECRETARIAT; POSITIONS; COMMISSIONS

2.1          Secretariat Profile, Size, Expertise and Independence

2.1.1      Secretariat profile. The Secretariat shall prepare a profile of its size and composition, considering the nature of AUSC Region 5’s business and the desired expertise and background of Secretariat members (the “Secretariat profile”).

2.1.2      Number of Members. The Secretariat shall be composed of five elected members and the General Manager who shall have no voting powers and shall not be voted for as provided for in Article 21 sub-section 21.2.5 of the AUSC Region 5 Constitution.

2.1.3      General Composition. The Secretariat shall use its best efforts to ensure that:

2.1.3.1    Its members can act critically and independently of one another;

2.1.3.2    Each Secretariat member can assess the broad outline of the AUSC REGION 5’s overall policy;

2.1.3.3    Each Secretariat member has sufficient expertise to perform his or her role as a Secretariat member within the Secretariat Profile;

2.1.3.4    The Secretariat shall match the Secretariat Profile;

2.1.3.5    At least one Secretariat member is a financial expert,

2.2          (Re)Appointment; Term of Office; Resignation

2.2.1      Election by Members. The Executive Committee elects members of the Secretariat in line with the provisions of Article 24 of the AUSC Region 5 constitution

2.2.2      Nominations Substance of Nominations and Recommendation to the Executive Committee for a candidate for the Secretariat shall state:

2.2.2.1    the candidates age,

2.2.2.2    his or her profession,

2.2.2.3    any convictions for any crimes involving dishonesty, fraud or breach of trust,

2.2.2.4    the positions he/she holds or has held in the past five years ( including memberships on any Secretariat of directors or management Secretariats/executive Commissions), nominating member ; and,

2.2.2.5    any other information relevant to assess his or her suitability as a member of the Secretariat.

2.3          Chairman and Vice-Chairman

2.3.1      Duties. The duties of the Chairman shall be as espoused in Article 18 of the AUSC Region 5 constitution including the following inter-alia;

2.3.2      Responsibilities. The Chairman ensures that:

2.3.2.1    the Secretariat satisfies its duties;

2.3.2.2    the agenda of the Secretariat meetings and ensuring that minutes are kept of such meetings;

2.3.2.3    consultation with external advisors appointed by the Secretariat is carried out;

2.3.2.4    problems related to the performance of individual Secretariat members are addressed;

2.3.2.5    internal disputes and conflicts of interest concerning individual Secretariat members and the possible resignation of such members as a result are addressed.

2.4          Secretary General

2.4.1      Duties. The Secretary General is primarily responsible for the activities of the Secretariat and its Commissions. She/he shall act as the spokesman for the Secretariat and is the principal contact for the General Manager. The Secretary General’s duties shall be as espoused in Article 20 of the AUSC Region 5 Constitution and in addition include the following inter-alia;

2.4.1.1    Organising an induction programme and, as needed, additional education or training programmes for Secretariat members, when appointed,

2.4.1.2    Ensuring Secretariat Members receive all information necessary for them to perform their duties;

2.4.1.3    Ensuring the Secretariat has sufficient time for consultation and decision-making;

2.4.1.4    Ensuring the Commissions function properly;

2.4.1.5    Evaluating the performance of Secretariat members at least once every year;

2.4.1.6    Ensuring that the Secretariat has proper contact with the General Manager.

2.5   Commissions

2.5.1      Establishment of Commissions. The Secretariat shall appoint Technical Commissions to perform specific tasks as espoused in Article 25 of the AUSC Region 5 Constitution.

2.5.2      Secretariat Responsibilities. The Secretariat remains collectively responsible for the decisions and actions taken by any Commission. A Commission may only perform the tasks delegated to it by the Secretariat as espoused in Article 26 of the AUSC Region 5 Constitution.

2.5.3       Commission Reporting. Each Commission must promptly inform the Secretariat of actions it has taken and major developments of which it becomes aware. Each Secretariat member has unrestricted access to all Commission meetings and records. The Secretariat shall as set forth in the Terms of Reference of the Commissions concerned, receive reports from the Commissions through the respective Commission Chairpersons.

2.5.4      Commission Terms of Reference. The Secretariat shall establish (and may amend) Terms of Reference for each Commission. The Terms of Reference shall indicate the role and responsibilities of the Commission, its composition and how it should perform its duties. The Terms of Reference of a Commission shall require that the Commission has no less than four and not more than six members in line with Article 25 of the AUSC Region 5 Constitution.

2.5.5      Duties of Chairpersons of technical commissions: Duties of Chairpersons of Technical Commissions shall be as espoused in Article 27 of the AUSC Region 5 Constitution.

2.5.6      Website Disclosure. The Terms of Reference and the composition of the Commission shall be posted on AUSC Region 5 website.

DUTIES AND POWERS

3.1    General Responsibilities.

The Secretariat shall oversee the general business of the AUSC Region 5. The Secretariat is responsible for such supervision and oversight,

3.1.1      Interest of the AUSC REGION 5.

3.1.1.1      The Secretariat shall act in the best interests of the AUSC Region 5 and its business, taking into consideration the interests of the AUSC Region 5 members and other stakeholders.

3.1.1.2      Secretariat members shall perform their duties independent of any particular interest in the AUSC Region 5.

3.1.1.3      Secretariat members should not support one interest without regard to other interests involved.

3.1.2      Quality of performance. The Secretariat is responsible for the quality of its own performance and that of full time employed staff and volunteers.

3.1.3      Action in Concert.

3.1.3.1      As much as they can, within their individual responsibilities as members of the Secretariat, members shall act and speak in concert with respect to important affairs and matters of principle and Secretariat decisions.

3.1.3.2      Members of the Secretariat shall be bound by collective responsibility under all circumstances

3.1.4      Provision on Information. The Secretary General/Treasurer and the General Manager shall see to it that the management, in a timely manner, provides the Secretariat and its Commissions with information they need to properly function.

3.1.5      Responsibility for Security Information. The Secretariat and its individual members each have responsibility for obtaining all information from the management and the internal and external auditors needed to carry out their duties. If the Secretariat thinks it is necessary, it may obtain information from officers and external advisers of the AUSC Region 5. The AUSC Region 5 shall aid the Secretariat in obtaining such information. The Secretariat may require certain officers and external advisers to attend, but never to vote at its meetings.

3.1.6      Access to Records. Each member of the Secretariat shall have access to the books and records of the AUSC Region 5, if useful to perform his or her duties. Unless the Terms of Reference of a Commission state otherwise, Secretariat members shall seek express authority from the Secretary General through the General Manager before exercising their rights under this provision.

3.1.7      Use of Experts. The Secretariat may hire experts to assist or advise them. The cost of such experts shall be agreed to by the Secretariat and shall be paid by the AUSC Region 5. A Secretariat member may rely upon the advice of a relevant expert so long as the member has no reason to question the expert’s report or conclusion.

3.2  Duties Regarding the Supervision of Management

3.2.1      Nature of Supervision.

In supervising the management, the Secretariat shall consider;

3.2.1.1      the achievement of the AUSC Region 5 objectives;

3.2.1.2      the strategy and risks in the AUSC Region 5 activities;

3.2.1.3      the structure and operation of the internal risk management, and audit and control systems;

3.2.1.4      the financial reporting process;

3.2.1.5      compliance with law and regulation in the territory of the Republic of Botswana; and,

3.2.1.6      any other matters the Botswana law requires the Secretariat to consider.

3.2.2      Financial Reporting.

The Secretariat shall supervise the AUSC Region 5 financial reporting in accordance with Section 3.5 below.

3.2.3      Annual Risk Review.

At least once a year, the Secretariat shall discuss the AUSC Region 5 strategy and business risks, management’s assessment of the internal risk management and control systems, and consider significant changes for the improvement and alignment of such systems.

3.2.4      Resolutions Subject to Approval.

The following resolutions are subject to the approval of the Secretariat:

3.2.4.1      Determining and amending the operational and financial strategic objectives of the AUSC Region 5;

3.2.4.2      Determining and amending key performance indicators in support of the strategic objectives (including, for example, any financial ratios);

3.2.4.3      The resolutions listed in Annex 1 of the charter; and,

3.2.4.4      Any other matters that the Botswana laws or regulations or the AUSC Region 5 constitution requires the Secretariat to approve.

3.3      Duties Regarding the Members and the Performance of the Secretariat

3.3.1      Duties Regarding Secretariat. The duties of the Secretariat (in consultation with the appropriate Secretariat Commissions) in relation to the members of the Secretariat include:

3.3.1.1   The determination of the number of Secretariat members, the establishment of Commissions and defining their role, the evaluation of the Secretariat, its individual members and its Commissions (including an evaluation of the Secretariat Profile and induction, education and training programmes); and,

3.3.1.2   Addressing any conflicts of interest issues between the AUSC Region 5 and members of the Secretariat.

3.3.2    Secretariat Self Assessment at least once a year. The Secretariat shall discuss its own activities and those of its individual members, the effectiveness of such activities, and the composition and competence of the Secretariat.

3.4   Other Duties of the Secretariat

3.4.1    Duties Generally. The other duties of the Secretariat include:

3.4.1.1      Duties regarding the external auditor as described in Section 3.6 of this Secretariat Charter and the Finance and Marketing Commission; and,

3.4.1.2      Other duties imposed by law, the AUSC Region 5 constitution, this Charter and the Terms of Reference of a Commission.

3.4.2      Annual Report and Accounts. The Secretariat shall draw up a report describing its   activities in the financial year, and containing the statements and information required by law and the AUSC Region 5 constitution.

3.5    Supervision of Financial Reporting

3.5.1      General Supervision Responsibilities. The Secretariat, in consultation with the Finance and Marketing Commission shall supervise compliance with written procedures for the preparation and publication of the annual report and accounts, and any other financial information. The Secretariat, through the Finance and Marketing Commission, shall also supervise the internal control and audit mechanisms for external financial reporting.

3.5.2      Discussion of Financial Reports. The Finance and Marketing Commission shall regularly, and in any event as soon as possible, provide the Secretariat with reports on the annual report and accounts, which will then be discussed at a meeting of the Secretariat. The annual report and accounts for the year just ended shall be discussed in a meeting with the Secretariat within six months of the year end.

3.5.3      External Auditor. The Secretariat may invite the external auditor to attend the meeting of the Secretariat at which the report of the external auditor with respect to the audit of the annual accounts is discussed, and at which the Secretariat shall decide whether or not to approve the annual accounts. The external auditor shall be given the opportunity to respond to all information.

3.5.4      Principal Contact with External Auditor. The Secretariat’s principal contact with the external auditor is through the General Manager. If any irregularities in the financial reports are discovered, the first discussion regarding such irregularities should be between the General Manager and the external auditor.  The Finance and Marketing Commission shall be notified of such discussions.

3.5.5      Recommendations by External Auditor. The Secretariat shall carefully consider and, if accepted, put into effect any recommendations made by the external auditor. This will include recommendations by the external auditor on the AUSC Region 5 internal controls, as expressed in the ‘management letter’.

3.6        Duties Regarding Nomination and Assessment of External Auditor

3.6.1      Appointment of External Auditor. The external auditor shall be appointed by the Executive Committee. The Secretariat shall nominate a candidate for this appointment to the Executive Committee based on an open, transparent and competitive selection process, and may recommend replacement of the external auditor. The Finance and Marketing Commission shall advise the Secretariat on such matters.

3.6.2      Compensation of External Auditor. The compensation of the external auditor, and instructions to the external auditor to provide non-audit services, shall be closely reviewed and approved by the Secretariat on the recommendations of the Finance and Marketing Commission, thus ensuring for the auditor’s independence.

3.6.3      Reports to the Secretariat. The Finance and Marketing Commission shall report their dealings with the external auditor to the Secretariat on an annual basis, including their assessment of the external auditor’s independence (for example, the desirability of rotating the responsible partners of the external auditor providing both auditing and non-audit services to the AUSC Region 5). The Secretariat shall take this into account when deciding its nomination to the Executive Committee for the appointment of an external auditor.

3.7        Conflicts of Interest.

Conflicts of interest and potential conflicts of interest between the external auditor and the AUSC Region 5 shall be resolved in accordance with the policy laid down in Annex 2 or, to the extent not dealt with in this Annex, as determined by the Secretariat on the recommendation of the Finance and Marketing Commission. Secretariat members must inform the Chairman of the Finance and Marketing Commission of any matters they know of that may compromise the independence of the external auditor or that may result in a conflict of interest between the external auditor and the AUSC Region 5.

3.8        Representation by External Auditor.

When appointed, the external auditor shall state it is aware of:

3.8.1      The AUSC Region 5 policy set out in Section 3.6 and Annex 2 of this Charter and,

3.8.2      Other matters provided for this Charter of the Finance and Marketing Commission and that she/he agrees to abide by and promote such policies.

3.9        Compensation of Executive Secretariat Members

3.9.1      Annual Remuneration Report. The Finance and Marketing Commission shall annually prepare and present to the Secretariat a remuneration report setting out the compensation policies and activities of the past year and an overview of the compensation policy and planned activities for the next financial year and subsequent years.

3.9.2      Approval by the Executive Committee Meeting. The remuneration policy planned for the next financial year and subsequent years as specified in the remuneration report shall be submitted to the Executive Committee for its approval. Every change to the compensation policy shall also be submitted to the Executive Committee for its approval.

3.9.3      Remuneration. The Secretariat shall determine the compensation of the General Manager on a proposal by the Finance and Marketing Commission and within the terms of the remuneration policy adopted by the Executive Committee.  The General Manager shall recuse him/herself when this matter is being discussed by the Secretariat.

3.9.4      Extraordinary Compensation. If a Secretariat member, former Secretariat member, consultant or other AUSC Region 5 volunteer is paid special compensation during any financial year, an explanation of this compensation shall be included in the remuneration report.

3.10     Relations with Members

3.10.1   Equal and simultaneous information. Where appropriate, the Secretariat shall provide all members with equal and simultaneous information.

3.10.2   Executive Committee Meetings; Record Date; Venue. The Secretariat shall determine the date and place of any Executive Committee meeting and a record date for the exercise of the voting at such a meeting. Unless there is an overriding AUSC Region 5 interest to act otherwise, the Secretariat uses its best efforts to provide members with all information necessary or requested for the members to properly act at the Executive Committee meeting.

3.11     Compliance with law.

The Secretariat shall ensure all laws and Constitutional provisions are complied with, regarding the rights of the Executive Committee and of individual members.

3.12     Changes of Corporate Governance.

Any substantial change to the corporate governance structure of the AUSC Region 5 shall be submitted to the Executive Committee for discussion.

3.13     Attendance by external auditor.

The Secretariat may invite the responsible partner (or certifying auditor) of the external auditor to attend the Executive Committee and address the meeting. The external auditor may be questioned by the Executive Committee in relation to the audit of the AUSC Region 5 audited financial statements.

SECRETARIAT MEETINGS; DECISION MAKING

4.1        Frequency, Notice, Agenda and Venue of Meetings

4.1.1      Frequency. The Secretariat shall meet as often as necessary, but not less than twice a year.  If possible, meetings shall be scheduled annually in advance according to an annual Secretariat calendar.

4.1.2      Notice and Agenda.

4.1.2.1      Meetings of the Secretariat are called by the Secretary General, the agenda of the meeting shall be sent to all Secretariat members at least seven calendar days before the meeting.

4.1.2.2      For each item on the agenda, an explanation in writing shall be provided and related documentation will be attached.

4.1.2.3      The Chairman shall consult with the Secretary General prior to convening the meeting on the content of the agenda.

4.1.2.4      Each Secretariat member and the General Manager has the right to request that an item be placed on the agenda for a Secretariat meeting; provided that the item is notified to the Chairman at least seven days prior to the meeting.

4.1.2.5      Secretariat members who have taken part in a meeting may not object to resolutions adopted at the meeting on grounds of an invalid notice.

4.1.3      Venue. Secretariat meetings are generally held in the country where the executive Committee meeting is hosted.  In addition, meetings of the Secretariat may be held by conference call, video conference or by any other means of communication, provided all participants can communicate with each other simultaneously.

4.2        Attendance of and Admittance to Meetings

4.2.1      Attendance by the General Manager. The General Manager shall attend Secretariat meetings unless the Secretariat instructs him not to attend. If requested by the Secretariat, other executives shall also attend meetings of the Secretariat in whole or in part.

4.2.2      Proxies. No proxy shall be allowed for a Secretariat member that is unable to attend a Secretariat meeting.

4.2.3      Undue Absence. If a Secretariat member fails to attend three consecutive meetings of the Secretariat, he or she shall cease to be a Secretariat member.  In addition, if a Secretariat member is frequently absent from Secretariat meetings she/he shall be required to explain such absences to the Secretariat.

4.2.4      Attendance by Non-Secretariat Members. The admission to a meeting of persons other than Secretariat members, and (if invited) other executives shall be determined by the Secretariat.

4.3        Chairman of the Meeting;

4.3.1      Chairman. Secretariat meetings are presided over by the Chairman or, in his or her absence, the vice-Chairman. If both are absent, one of the other Secretariat members, designated by a simple majority vote of the Secretariat members present at the meeting, shall preside.

4.4        Decision Making within the Secretariat

4.4.1      Preference for Unanimity. The Secretariat members shall try to unanimously adopt resolutions. However, Secretariat members are encouraged to voice constructive dissenting opinions and these may be recorded in the minutes.

4.4.2      Individual Vote.

Each Secretariat member has the right to cast one vote.

4.4.3      Majority Vote; Quorum. Where unanimity cannot be reached and the law, the AUSC Region 5 constitution or this Charter do not prescribe a larger majority, all resolutions of the Secretariat are adopted by a majority of the votes cast. In the event of a tie, the Chairman has the deciding vote.

4.4.4      Adoption at Meeting. Resolutions of the Secretariat are adopted at a meeting.

4.4.5      Round robin resolution (Written Consent). Secretariat resolutions may also be adopted by way of a round robin provided the proposal concerned is submitted to all Secretariat Members and none of them objects to this form of adoption. Adoption of round robin resolutions shall be effected by statements in writing from all the Secretariat members. A statement from a Secretariat member who wishes to abstain from voting on a particular resolution which is adopted in writing must reflect the fact that she/he does not object to this form of adoption.

4.4.6      Emergency Procedures. The Secretariat may deviate from the provision of sections 4.4.4 and 4.4.5 if this is deemed necessary by the Chairman, considering the urgent nature and other circumstances of the cases, provided that all Secretariat members are allowed the opportunity to participate in the decision-making process. The Chairman and the secretary General shall then prepare a report on a resolution so adopted, which shall be added to the documents for the next meeting of the Secretariat for ratification.

4.4.7      Minutes. Minutes must be drawn up for every Secretariat meeting and for every resolution adopted outside a meeting not later than twenty-one days after the Secretariat meeting. The minutes are to be signed by the Chairman and secretary General and then added to the organisation’s records. Each member of the Secretariat shall receive a copy of the minutes.

4.4.8      Certification of Resolutions. A resolution adopted by the Secretariat may be publicly disclosed only through a statement from the Chairman and or the Secretary General, both of whom could delegate the General Manager to publicly disclose on their behalf.

OTHER PROVISIONS

5.1        Conflicts of Interest of Secretariat Members

5.1.1      Duty to Disclose. A Secretariat member shall immediately report to the Chairman of the Secretariat any conflict of interest and shall provide all relevant information, including information concerning his or her spouse, registered partner or other life companion, foster child and relatives by blood or marriage up to the second degree. The Secretariat member concerned shall not take part in the assessment by the Secretariat of whether a conflict of interest exists.

5.1.2      Related Party Transactions. A potential conflict of interest exists if the AUSC Region 5 intends to enter into transaction with a related party, and the AUSC Region 5 shall develop a policy on how to ensure that the rights of members are protected during such transactions. A related party includes the following:

5.1.2.1      The Secretariat member of the AUSC Region 5, organisations to which it is affiliated, and associates.

5.1.2.2      Any subsidiary or afflicted company that is not wholly owned.

5.1.2.3      The General Manager, other executives, and key officers, including anyone who directly reports to the Secretariat or the General Manager.

5.1.2.4      The father, mother, sons, daughters, husband, or wife of any of the natural persons listed in Clauses (5.1.2.1; 5.1.2.2 and 5.1.2.3 above).

5.1.2.5      Any business, and the directors, CEO and officers of any business, in which the natural persons listed in paragraphs (5.1.2.1) to (5.1.2.5) own jointly or severally at least 20% of the voting rights.

5.1.2.6      Any person whose judgement or decisions could be influenced as a consequence of an arrangement or relationship between or involving themselves and any of the persons in paragraphs (5.1.2.1) to (5.1.2.6).

5.1.3      Abstention by Conflicted Party. A Secretariat member shall not take part in any discussion or decision-making regarding any subject or transaction in which she/he has a conflict of interest with the AUSC Region 5.

5.1.4      Requirements to Approve Conflicts of Interest. All transactions in which there are conflicts of interest with Secretariat members shall be agreed on terms that are customary for arm’s length transactions in the AUSC Region 5 business.  Decisions to enter into transactions in which there are conflicts of interest with Secretariat members require the approval of the Secretariat.

5.2        Allowances of Secretariat Members

5.2.1      Approval by Executive Committee Meeting.

5.2.1.1  The allowances of the Secretariat members is determined by the Executive Committee. The Secretariat shall submit proposals on its compensation to the Executive Committee.

5.2.2      Reimbursements of Costs. Apart from their allowances, Secretariat members shall be reimbursed for all reasonable costs incurred in connection with their attendance of meetings. The reasonableness of such costs shall be approved by the Secretary General. Any other expenses shall be reimbursed only if incurred with the prior consent of the Secretary General.

5.2.3      Loans and Guarantees. The AUSC Region 5 does not grant personal loans, guarantees or the like to Secretariat members.

5.3        Induction Programme, Ongoing Training and Education

5.3.1      Induction Programme. Upon election, each Secretariat member shall participate in an induction programme that covers the organisation’s strategy, general financial and legal affairs, financial reporting by the AUSC Region 5, any specific aspects unique to the AUSC Region 5 and its business activities, and the duties and responsibilities of a Secretariat member.

5.4        Annual Review of Training.

The Secretariat shall conduct an annual review to identify areas where the Secretariat members require further training or education.

5.5        Costs for AUSC REGION 5.

The costs of the induction course and any training or education shall be paid for by the AUSC Region 5.

5.6        Excess Memberships.

Members of the Secretariat shall declare their other positions including other Boards that they serve so as to ensure they can perform their duties as members of the Secretariat.

5.7        Notice of outside positions.

Secretariat members must inform the Chairman and the Secretary General of their other positions which may be of importance to the AUSC Region 5 or the performance of their duties before accepting such positions. If the Chairman determines that the matter shall be discussed by the Secretariat in accordance with Section E.I. of this Charter. The Secretary General/Treasurer shall keep a list (register) of the outside positions held by each Secretariat member.

CONFIDENTIALITY

6.1        Duty to keep information Confidential.

Unless required to do so by law, no Secretariat member or member of staff shall, during his or her membership on the Secretariat or employment or afterwards, disclose any information of a confidential nature regarding the business of the AUSC Region 5 and/ or any companies in which it holds a stake, that came to his or her knowledge in the capacity of his or her work for the AUSC Region 5 and which s/he knows or should know to be of a confidential nature. A Secretariat member may disclose such information to fellow Secretariat members as well as to staff members of the AUSC Region 5 and companies in which the AUSC Region 5 holds a stake who, in view of their activities for the AUSC Region 5 and companies in which the AUSC Region 5 holds a stake, should be informed of the information. A Secretariat member shall not use such confidential information for his or her personal benefit.

6.2        Return of Confidential Information.

At the end of each Secretariat member’s term of office, or termination of employment in the case of a staff member, she/he shall return all confidential documents in his or her position to the AUSC Region 5 or guarantee their disposal in a manner that ensures confidentiality is preserved.

6.3        Notice of Disclosure.

If a Secretariat member or member of staff intends to disclose to third parties information which she/he has become aware of in his or her duties and which may be confidential, she/he must inform the Chairman of his or her intent and the identity of the person who is to receive the information with sufficient notice for the Chairman to assess the situation and advise the Secretariat member. This section applies to both official and personal statements and to any person attending Secretariat meetings which are clearly only intended for the Secretariat.  The Chairman may delegate this responsibility to a designated member of the Secretariat.

MISCELLANEOUS

7.1        Acceptance by Secretariat Members.

Anyone who is elected as a Secretariat member must, upon assuming office, declare to the AUSC Region 5 that she/he accepts and agrees to comply with the provisions of this Charter by appending his/her signature to this Charter as provided. A corresponding reference to this extent shall be included in the Secretariat confirmation letter.

7.2        Occasional Non- Compliance.

If permitted by law, the Secretariat may occasionally decide by unanimous decision at its sole discretion not to comply with the provisions of this Charter.

7.3        Amendment.

This charter may be amended by the Secretariat at its sole discretion.

7.4        Interpretation.

In case of uncertainty or difference of opinion on how a provision of this charter should be interpreted, the opinion of the Secretariat shall be decisive.

7.5        Partial Invalidity.

If one or more provisions of this Charter are (or become) invalid, this shall not affect the validity of the remaining provisions. The Secretariat may replace the invalid provisions by provisions which are valid and the effect of which, given the contents and purpose of this Charter is to the greatest extent possible, similar to that of the invalid provisions.

ANNEXURE

8.1        Annexure 1: List of Approvals Required by Secretariat

The approval of the Secretariat is required for:

8.1.1      All material transactions between the AUSC Region 5 and members of the AUSC Region 5;

8.1.2      A resolutions on the operational and financial aims of the AUSC Region 5, the strategy designed to achieve the aims, and any parameters to be used in relation to the strategy:

8.1.3      All material transactions in which there are conflicts of interest with Secretariat members:

8.1.4      The appointment and removal of the General Manager:

8.1.5      The remuneration policy for senior management in general and General Manager in particular;

8.1.6      The annual capital investment budget, all acquisitions and disposals of business activities whose sales exceed US$100,000.00 in the year prior to the acquisitions or disposal:

8.1.7      All Financial statements before publication, and,

8.1.8      All other acts that require the approval by law, the AUSC Region 5 constitution, or this Charter.

8.2        Annex 2: Policy Regarding Independent External Auditor

8.2.1      Policy

The AUSC REGION 5 shall use the service of the external auditor only to the extent this does not prejudice the independence of the external auditor.

8.2.2      Terms of Reference

The external auditor must be independent. These regulations are based on the principles that:

8.2.2.1      the external auditor must be independent from the client audited, both in mind as in appearance; and,

8.2.2.2      an external auditor is someone who  is able, in the light of all circumstances, to form an objective and impartial opinion on all matters that fall within the scope of his or her assignment.

8.2.2.3      An external auditor is not allowed to perform a statutory audit if she/he has financial , commercial, employment or other ties with the client that in the opinion of a reasonable and properly  informed third party expert compromise the auditor’s independence.

8.2.2.4      The AUSC REGION 5 may require from the external auditor that she/he maintains the right balance between effectiveness and efficiency, e.g. audit costs, risk management, independence and reliability. The Finance and Marketing Commission shall see to it that the external auditor complies with the relevant provisions of the Botswana law and the above terms of reference , and may request more detailed explanations and written confirmations from the external auditor that these provisions are followed.

8.2.2.5      In addition to the audit work, the external audit of the AUSC Region 5 may also carry out non-audit work, to the extent allowed under applicable legislation and regulations and the internal procedures of the AUSC Region 5. The non-audit work shall not jeopardize the independence of the external auditor. In no-event shall the individuals performing the audit work engage in any non-audit work. All audit and non-audit work (including fees and conditions) carried out by the external auditor for the organisation must be approved in advance by the Secretariat on a proposal of the Finance and Marketing Commission. The Secretariat may, within the framework set by the Secretariat, delegate this duty to the Finance and Marketing Commission that in turn, in exceptional circumstances only, may delegate this power to its Chairman, on the understanding that a decision by the Chairman of the Finance and Marketing Commission to give his or her approval will be presented to the full Finance and Marketing Commission at its next meeting.

8.2.3      Audit Work

Audit work is the annual work financial reports of the AUSC Region 5, the assessment of interim financial reports that are disclosed, services that are traditionally provided by the external auditor and that are related to filings and obligations under legislation or regulations, and service that only the external auditor can reasonably provide. The external auditor does not need to go through a tender process for each individual engagement.

8.2.4      Non-Audit Work

For non-audit work of the external auditor other than:

8.2.4.1      Service that can only be provided by the external auditors;

8.2.4.2      Services that are the extension of the work performed as part of the audit of the AUSC Region 5 or rely on work performed as a part of the audit such that the quality and timeliness of the service can most effectively be provided by the external auditor or;

8.2.4.3      Services that enhance the effectiveness of the external auditors’ examination of the AUSC Region 5 financial statements, the Secretariat shall on the proposal of the Finance and Marketing Commission set one or more financial thresholds

8.2.4.3.1    For non-audit work by the external auditor that is expected to exceed these thresholds, a very strong rationale must be presented to support the selection of the external auditor and alternative service providers should be considered.

8.2.4.3.2    For further explanation whether certain activities should be considered audit work or non-audit work and whether certain non-audit activities fall under any of the categories listed above, the Chairman of the Finance and Marketing Commission should be contacted who, when in doubt, will consult the General Manager.

8.3  Rotation of partners Responsible for Audit Work

8.3.1      In order to prevent the external auditor and the AUSC Region 5 becoming too close, the number of years a person may be part of the audit team of the external audit, is capped.

8.3.2      Partners of the audit team of the AUSC Region 5 who are charged with essential audit tasks must be replaced at most every three years after the start of their involvement. The partners of the audit team of the AUSC Region 5 charged with essential tasks who have been replaced are not allowed to work on a new assignment for the AUSC Region 5 until at least three years have expired from the date of their replacement.

8.3.3      The Finance and Marketing Commission shall also supervise the risk of dependency of other members of the audit team of the AUSC Region 5 who are involved with the audit for a significant period. The Finance and Marketing Commission shall consult the responsible partner of the external auditor regularly on safeguard set up by the external audit to assess the risk of dependency and to reduce it to an acceptable minimum level.

8.4        Appointment of the External Auditor

The external auditor shall be appointed in accordance with Section C.VI. of the Secretariat Charter. If the decision is taken to call in the service of another external auditor, the tender process approved by the Finance and Marketing Commission shall be followed.

8.5        Staff Transfer Restrictions

8.5.1      The AUSC Region 5 and the external auditors shall agree on a policy regarding the restriction of staff transfers from the AUSC Region 5 to the organization of the external auditors and vice versa, taking into account all relevant legislation and regulations.

8.5.2      In no event shall the AUSC Region 5 hire an audit partner or other senior member of the audit staff of the external audit firm if such a person audited, conducted a review or prepared the AUSC Region 5’s financial statements during  the previous one year, in particular as the AUSC Region 5’s Chief Finance Officer.

9      This Charter is subject to the approval and adoption by the Secretariat and ratification by the Council of Ministers.