The primary function of the Joint Audit and Compliance Committee (the “Committee”) is to assist the University of Connecticut Board of Trustees and the University of Connecticut Health Center Board of Directors in fulfilling their oversight responsibilities relating to: the integrity of the University’s financial statements, the systems of internal control, the performance of the Office of Audit, Compliance & Ethics functions, and the University’s compliance with legal and regulatory requirements. In so doing, it is the responsibility of the Committee to maintain free and open communication among the Committee, management, the internal auditors and compliance officers/staff of the University. The Committee shall take all appropriate actions to set the overall University tone for quality financial reporting, sound business risk practices, and ethical behavior.
The Committee shall consist of seven members all of whom are independent of management and the University. Four members will be selected from the University of Connecticut Board of Trustees (BOT) and three members will be selected from the Board of Directors of the University of Connecticut Health Center (UCHC). Members of the Committee shall be considered independent as long as they do not accept any consulting, advisory, or other compensatory fee from the University and are not affiliated persons of the University, its subsidiaries or management.
A majority of Committee members shall be “financially literate” and at least one member shall be a “financial expert.” Financial literacy is defined as being able to read and understand fundamental financial statements. Financial expert means a person who has: an understanding of generally accepted accounting principles and financial statements; experience applying such principles; experience preparing or auditing financial statements; experience with internal controls; and an understanding of audit committee functions.
Roles and Responsibilities
Assure that management is setting the appropriate tone in communicating the importance of internal control and ensuring that all individuals have an understanding of their roles and responsibilities and also that the systems are in place and being followed to ensure appropriate compliance with internal control procedures
Evaluate the extent to which internal and external auditors review computer systems and applications, the security of such systems and applications, and the contingency plan for processing critical business functions information in the event of a systems breakdown
Determine whether internal control recommendations made by internal and external auditors have been implemented by management
Ensure that internal auditors keep the Joint Audit and Compliance Committee informed about fraud, illegal acts, deficiencies in internal control, and other audit and compliance – related matter.
Review significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact on the University’s financial statements
Review significant risks and exposures and the plans to minimize such risks.
Annual Financial Statements
Review the annual financial statements and determine whether they are complete and consistent with the information known to Committee members, and assess whether the financial statements reflect appropriate accounting principles
Review the annual report before its release and consider whether the information is adequate and consistent with members’ knowledge about the University and its operations
Compliance with Laws and Regulations
Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up (including disclosure, repayment and disciplinary actions) on any fraudulent acts or other irregularities
Periodically obtain updates from management, and the University’s counsel regarding compliance
Be satisfied that all regulatory compliance matters have been considered in the preparation of the financial statements and other required reports
Review the findings of any significant examinations by regulatory agencies and organizational response
The Office of Audit, Compliance and Ethics
Review and ensure that University of Connecticut has the appropriate structure, staffing and capability to effectively carry out the internal audit, compliance and ethics responsibilities
Concur in the appointment, replacement, reassignment, or dismissal of the Chief Audit & Compliance Officer
Review and confirm the structure, priorities and key action plans of the audit, compliance and ethics function
Appoints, reviews contracts and approves fees of outside auditors
Establishes policies that ensure management and trustee independence of outside auditors, including “revolving door” employment restrictions and prohibiting external auditors from providing management consulting services, particularly with respect to information technology and systems
Ensure that significant findings and recommendations made by the Office of Audit, Compliance & Ethics staff and external auditors are received, discussed and acted upon in an appropriate and timely manner
Review, with the University’s counsel, legal matters that could have a significant impact on the University’s financial statements
Review and update the Joint Audit and Compliance Committee charter; receive approval of changes from the Board of Trustees
Regularly update the Board of Trustees and Health Center Board of Directors on Committee activities, any key external audit issues or regulatory reviews, and make appropriate recommendations
Review and approve the University’s standards of conduct and other compliance-related policy guidance
Resources and Authority
The Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the University and the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties.
A majority of the members of the Committee will constitute a quorum for the transaction of business. The Committee shall maintain written minutes of its meetings, which will be filed with the Secretaries of the Board of Trustees and Health Center Board of Directors. Reports of all meetings will be made to the Board of Trustees and Board of Directors.
The Committee may request any officer, employee, outside counsel or external auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
As part of its responsibility to foster open communication, the Committee shall provide sufficient opportunity for the internal audit and compliance staff and external auditors to meet privately with the Committee. At least annually, or as needed, the Committee shall meet separately with the chief audit and compliance officer and management.
Adoption of Charter
Approved by the Joint Audit & Compliance Committee on 06/07/12