Board of Trustee Regulations | Appendix A

APPENDIX A, CHARTER OF THE FINANCE AND AUDIT COMMITTEE

Oversight of the University's Strategic Financial Planning Over a Multi-year Time Frame

The Committee shall review at least annually, the long-term financial plans of the University. These plans will include future projections of annual operating and capital requirements of the University and the related funding sources. As part of the review of the long-term financial plans, the Committee shall review the current and projected debt levels of the University, including consideration of impacts on debt ratings, annual cash flows and liquidity.

Oversight of Financial Reporting, Internal Controls and the Independent Audit 

The Committee shall be responsible for recommending to the Auditor of the State of Ohio (the “Auditor”) the selection and appointment of the independent auditor. The Committee, together with the Auditor, shall be responsible for the compensation and oversight of the work of the independent auditor. The independent auditor shall report directly to the Committee and to the Auditor as required.

The Committee shall review all auditing services and pre-approve permitted non-audit services (including the fees and terms thereof) to be performed for the University by the independent auditor. Unless specifically directed to do so by the Auditor, the independent auditor is prohibited from performing any non-audit services that are specifically prohibited by independence rules set by the Securities and Exchange Commission and by the General Accounting Office (GAO). The Committee may delegate pre-approval authority to the Chair subject to later review and approval by the Committee.

The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent, legal, accounting or other advisors to the extent that such services are permissible under the laws and regulations governing the University. The University shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the independent advisors.

The Committee shall meet with representatives of the independent auditor to review the annual audit plan and results of the audit.

The Committee shall review and discuss reports from the independent auditor and University administrators on:

  1. All significant accounting principles and judgments used in the preparation of the audited financial statements.
  2. Any significant changes in the selection or application of accounting principles.
  3. All significant alternative treatments of financial information within generally accepted accounting principles that have been discussed with University administrators, the ramifications of the use of such alternative treatments, and the treatment preferred by the independent auditors.
  4. Significant issues relating to the adequacy of the University’s internal controls.
  5. Other material written communications between the independent auditor and University administrato

The Committee shall discuss with the independent auditor the matters required to be discussed by professional auditing standards relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with University administrators.

The Committee shall review and recommend the annual audited financial statements to the Board of Trustees.

Annually, the Committee shall obtain and review a report from the independent auditor regarding:

  1. The independence of the independent auditor, including compliance with GAO’s independence standards,
  2. the independent auditor’s internal quality-control procedures,
  3. any material issues raised by the most recent internal quality-control review, or publicly disclosed findings resulting from reviews of public oversight and regulatory bodies or investigations by governmental and regulatory authorities within the preceding five years respecting one or more independent audits carried out by the firm,
  4. any steps taken to deal with any such issues or findings, and
  5. all relationships between the independent auditor and the Universi

The Committee shall evaluate the qualifications, performance and independence of the independent auditor, including the lead partner, and consider whether the accountants’ quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, taking into account the opinions of University administrators and internal auditors on these matters. The Committee shall present its conclusions with respect to the recommendation of the appointment or retention of the independent auditor to the Board of Trustees annually.

The Committee shall use its best efforts to ensure the Auditor’s appointment of the independent auditor includes the rotation of the lead audit partner having primary responsibility for the audit consistent with rules and regulations of the Securities and Exchange Commission.

The Committee shall recommend to the Board policies for the University’s hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the University or affiliated entities.

Oversight of the University's Budget

The Committee shall review and recommend the annual operating budget of the University, including the following matters:

  • Annual operating budgets, including guidelines and salary pools for faculty and staff.
  • Changes in tuition and fees
  • Room and board rate
  • Ordinances, resolutions and other items related to the fiscal management of the University that are proposed by the University’s senior administrato

The Committee shall receive periodic reporting of actual results as compared with the budgets for operating activities throughout the year, as appropriate.

Oversight of the University's Capital Expenditures

The Committee shall periodically review the University’s long-range facilities plan. The Committee shall review and recommend:

  • The University’s biennial capital budget
  • Proposed capital improvements in excess of specified dollar amounts
  • Issuance of capital bonds to finance capital projects
  • The annual report of gift-funded projects
  • Capital improvement contracts, including design and construction
  • Real property transactions, including purchase, sale, lease, and easements The Committee shall receive periodic reporting of actual results as compared with the budget for capital appropriations throughout the year, as appropriate.

Oversight of the University's Investment Policies and Results

The Committee has oversight responsibility for the University’s Non-Endowment Investments. The Committee serves as the Investment Committee required by Ohio Revised Code 3345.05.

The responsibilities of the Committee in its role as Investment Committee are:

  1. To review the University’s Non-Endowment Funds Investment Policy adopted pursuant to Ohio Revised Code 33405 and recommend any proposed changes to the Board of Trustees for approval
  2. To meet at least quarterly and review periodic investment reports and advise the Board on investments made in accordance with the University’s Non-Endowment Funds Investment Policy.
  3. To review the University’s Non-Endowment Funds Annual Expenditure Policy and recommend any proposed changes to the Board of Trustees for approval
  4. To retain the services of an investment advisor who meets the qualifications of Ohio Revised Code 3345.05.
  5. To report to the Board of Trustees at least semi-annually.

The Committee also reviews the University’s Endowment. The Committee reviews and recommends any proposed changes to the Endowment Spending Policy and Endowment Administrative Fee to the Board of Trustees for approval. The Committee reviews periodic Endowment investment reports.

Oversight of the University’s Retirement Plans

The Committee has oversight and monitoring responsibility for the University’s sponsored retirement plans. The Board of Trustees has delegated primary fiduciary responsibility for the University’s sponsored retirement plans to the Senior Vice President for Finance and Business Services and Treasurer. The Senior Vice President for Finance and Business Services and Treasurer shall meet with the Committee at least once annually to review with the Committee any significant changes in the material terms of the plans; the selection, evaluation or removal  of approved retirement plan providers; the investment performance under the plans; any changes to the funding structure or investment options under the plans; and any other material information relating to the administration of the plans or their investments.

Oversight of Internal Audit Activities

The Committee shall review the appointment and replacement of the Chief Audit Officer (CAO). The CAO shall present to the Committee the annual plan and scope of internal audit activities for approval. The CAO shall also present budget and staffing for the current year and review any significant changes during the year. The CAO shall review all significant issues raised in reports to University administrators, including the administrators’ responses to internal audit recommendations. The Committee shall approve the IACS Charter; approve the risk-based internal audit plan; meet separately on a periodic basis with the CAO; ensure there are no restrictions or limitations on the scope of work of Internal Audit and Consulting Services; and review the CAO’s annual performance as part of approving the annual compensation of the CAO.

Oversight of Compliance Processes

The Committee shall review annually reports from the General Counsel regarding compliance with University policies, including ethical conduct requirements and other applicable state and federal laws and regulations, including any material reports or inquiries from regulatory or governmental agencies. The General Counsel shall discuss with the Committee any legal, compliance or regulatory matters that may have a material impact on the University’s financial statements.

The Committee shall review and approve procedures recommended by the General Counsel regarding the receipt, retention, and treatment of communications received by the University regarding compliance with the University’s policies, including ethical conduct requirements and other applicable laws and regulations, accounting, internal controls or auditing matters. The General Counsel shall provide periodic reports to the Committee regarding any such communications received by the University and resolution thereof.

Risk Assessment 

At least annually, the Committee shall review reports from the University administrators regarding risk assessment, which is the University’s identification and analysis of relevant risks to the achievement of its objectives, including plans for managing the risk.

Other Matters 

The Committee shall make regular reports to the Board of Trustees. The Committee shall review and assess the adequacy of this regulation annually and shall submit any proposed changes to the Board of Trustees for approval. The Committee shall annually review its own performance.