Audit Committee

Audit Committee Authority

Pursuant to Resolution No. 10K, dated December 6, 2005, the Board of Education has established an audit committee to assist the Board of Education in the oversight of both the internal and external audit functions. The requirement to create an audit committee was established by Education Law §2116-c. According to §2116-c (4), the role of an audit committee shall be advisory and any recommendations it provides to the Board shall not be substituted for any required review and acceptance by the Board of Education.

Mission

Somers Central School District Board of Education has established an audit committee to provide independent assistance to the Trustees in the oversight of the external and internal auditing functions. The committee’s mission is to carry out the duties and responsibilities set forth in this charter, further the districts commitment to governance, advance best practices for internal control and promote the integrity of financial and management reporting.

Composition and Requisite Skills

The Somers Central School District Audit Committee is comprised of a minimum of three members serving a maximum three year consecutive term.

The Committee members collectively should possess the expertise and experience in accounting, auditing, financial reporting and school district finances needed to understand and evaluate the school district’s financial statements, the external audit of those statements and the district’s internal audit activities. Accordingly, the Audit Committee’s members should:

• Possess the requisite skills and experience necessary to understand technical and complex financial reporting issues.
• Have the ability to communicate with, and offer advice and assistance to, public finance officers and auditors.
• Be knowledgeable about internal controls, financial statement audits and management/operational audits.

Duties and Responsibilities

The duties and responsibilities of the Somers Central School District Audit Committee includes the following:

External Audit Focus

• Recommend selection of the external auditor to the Board of Education.
• Meet with the external auditor prior to commencement of the audit to review the engagement letter.
• Review and discuss with the external auditor any risk assessment of the district’s fiscal operations developed as part of the auditor’s responsibilities under governmental auditing standards for a financial statement audit and federal single audit standards, if applicable.
• Review the external auditor’s assessment of the district’s system of internal controls.
• Receive and review the draft annual audit report and accompanying draft management letter and, working directly with the external auditor, assist the Board of Education in interpreting such documents.
• Make a recommendation to the Board of Education on accepting the annual audit report.
• Review any corrective action plan developed by the school district and assist the Board of Education in the implementation of such plans.

Internal Audit Focus

• Make recommendations to the Board of Education regarding the appointment of the internal auditor.
• Assist in the oversight of the internal audit function.
• Review the annual internal audit plan to ensure that risk areas and key control activities are periodically evaluated and tested.
• Review the results of internal audit activities and significant recommendations and findings of the internal auditor.
• Monitor implementation of the internal auditor’s recommendations by management.
• Provide input on the performance evaluation of the internal auditor. 

Administrative Matters

• Hold regularly scheduled meetings.
• Administer other related duties as prescribed by the Board of Education.
• Review and recommend revisions to the Audit Committee Charter.

Membership

The membership duties of the Audit Committee include the following:

• Good Faith – Members of the Committee shall perform their duties in good faith, in a manner they reasonably believe to be in the best interests of the Committee on behalf of the Board and the District with such care as a generally prudent person in a similar position would use under similar circumstances.
• Independence – The following individuals would be precluded from being an Audit Committee member:
  • Someone currently or previously employed by the District during the past 12 months.
  • Someone currently or previously providing services contractually to the District during the past 24 months.
  • Someone of the immediate family (husband, wife & any children and their spouses) of an individual who is, or has been in any of the past 24 months, employed by the district, providing services contractually to the District or contractually related to the District as a board member or an administrator.
  • Someone who is a partner in, a controlling owner or an executive of, any for-profit business to which the district made, or from which the district received, payments that are or have been significant to the district or the for-profit business entity in any of the past five years.
• Confidentiality – During the exercise of duties and responsibilities, the Committee members may have access to confidential information. The Committee shall have an obligation to the district to maintain the confidentiality of such information.

Meetings and Notification

The Audit Committee shall meet a minimum of three times each year. An agenda of each meeting should be clearly determined in advance and the Audit Committee should receive supporting documents in advance, for reasonable review and consideration. Any member of the Board of Education, who is not a member of the Audit Committee, may attend audit committee meetings if authorized by a resolution of the Board.

The Audit Committee shall present an oral summary of each Audit Committee meeting at the Board meeting.

Decision-Making Process

All decisions shall be reached by consensus of those members present at the meeting. Consensus is defined as an acceptable solution that all can agree to support. If consensus cannot be reached at the committee level, a member can elect to present the issue to the entire board of trustees to obtain consensus. If necessary a polling of the voting membership will take place and simple majority will rule. A quorum constitutes a simple majority of the total membership and meetings will not be conducted unless a quorum is present.

Reporting Requirements

The Audit Committee has the duty and responsibility to report its activities to the Board of Education. Periodic reports of Audit Committee activities are an important communication link between the Audit Committee and the Board on key decisions and responsibilities. The Audit Committee’s reporting requirements are to:

• Report on the scope and breadth of committee activities so that the Board of Education is kept informed of its work.
• Report on their review of the District’s annual audit report and accompanying management letter and their review of significant findings and recommendations of the internal auditor.
• Report on suspected fraud or abuse or material defects in the internal control systems.
• Report on material or significant non-compliances with laws or District policies and regulations.
• Report on any other matters that should be disclosed to the Board of Education.

Review of the Charter

The Audit Committee shall assess and report to the Board of Education on the adequacy of this Charter no less than an annual basis or as necessary. Charter modifications, as recommended by the Audit Committee, should be presented to the Board of Education in writing for their review.