Purpose

 The Audit Committee is appointed by the Board to assist in monitoring the independent registered public accounting firm’s qualifications and independence, the performance of the annual audit, and the compliance with regulatory and legal requirements, and institutional policies by the University. The Audit Committee is accountable to the Institutional Resources and Sustainability Committee of the Board of Trustees.

Committee Membership

The Board will appoint at least three trustees to serve on the committee and will select one of these members to serve as committee chair. Each committee member must be independent of management of the institution and free of any relationship that would impair such independence. Members may not receive consulting, advising, or other fees from the institution or any affiliated foundation or entity related to the institution. 

The majority of the committee members should have working knowledge of basic financial statements and independent audit practices, and if practicable, at least one member should be a financial expert. A financial expert is someone who has an understanding of generally accepted accounting principles (GAAP) and financial statements and experience with internal control and procedures for financial reporting. Committee may at its discretion recommend to the board that they contract with an attorney or other external expert resources.

The University’s chief financial officer serves as the primary staff and liaison to the committee. The President of the University and the chair of the Board are entitled to attend meetings of the Committee and to participate in all Committee discussions. The administrative assistant for Finance and Operations serves as recording secretary for the committee.

Meetings

The Audit Committee will meet at least annually with the independent registered public accounting firm to review the audited financial statements and will meet in executive session with the auditors to discuss pertinent matters. The audit committee may request any officer of the University or the University’s outside counsel, independent registered public accounting firm, or consultant to attend any meeting of the committee. 

Committee Responsibilities

1. Audit: The Committee has the authority to appoint or replace the independent registered public accounting firm.  The Committee will be responsible for the oversight of the annual financial audit and will review the institution’s accounting and financial reporting controls with senior management and outside auditors. The Committee will receive and review the institution’s annual financial reports and forward them with recommendations to the full Board. The Committee will also review with senior management and the auditor’s the management letter and any recommendations or corrective actions necessary as a result of the audit.   The annual audit includes an opinion related to the University compliance with federal funds regulations. The Committee will review any findings or management letter comments related to compliance with these programs. The Committee will review the IRS Form 990 and all of its disclosures. The Committee will review and discuss with management and the auditors the effect of any significant regulatory or accounting principles, practices, and procedures applied by the institution in preparing its financial statements, or any changes expected thereto. 
2. Compliance and Risk Management: The committee monitors formal risk management programs for finance, compliance, and reputational risks including reports on major financial risks and the institution’s risk management activities, a summary of conflict of interest reports, and an annual report of significant outstanding and resolved litigation. The Committee will review annually the Conflict of Interest Policy, review any potential conflicts of interests and recommend any required actions, and review with the full board to ensure compliance with the policy.

Communication with the Board

One of the Committee’s principal responsibilities is to keep the Board informed on the University’s financial audit, compliance reporting, and risk management. Committee takes appropriate steps to ensure that all Board members understand the significance of the financial audit and reports as well as underlying assumptions. Committee members have an obligation to become knowledgeable about general higher education audit, compliance, and risk management practices and to ensure that policy discussions conducted at the Board level are informed and transparent. 

Limitation of the Committee's Role

While the Audit Committee has the responsibility and power set forth in this charter, it is not the responsibility of the Committee to conduct financial audits or determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent registered public accounting firm. 

Review of Charter

This charter will be reviewed and reassessed periodically by the Audit Committee and Institutional Resources and Sustainability Committee, and any proposed changes shall be submitted to the Board of Trustees for approval.

Adopted and approved, November 2019

Board and Institutional Policies for Committee Oversight

The Audit Committee has responsibility to annually review and recommend any proposed changes to the Board of Trustees for approval.

• EMU Conflict of Interest Policy (GPP.01 Conflict of Interest Policy)