Internal Auditor Charter

University of Northern Colorado Board of Trustees
Audit and Finance Committee Charter
Proposed April 29, 2010


PURPOSE

The Board of Trustees Audit and Finance Committee (the Committee) is a subcommittee of the University of Northern Colorado’s Board of Trustees.  Its purpose is to assist the Board of Trustees in fulfilling its fiduciary responsibilities related to reviewing and monitoring the:

  • Independence, authority, and performance of external and internal auditors in examining operations;
  • Completeness and accuracy of annual and interim financial reporting;
  • University’s internal audit department’s charter, organizational structure, staffing, activities, plans and reports;
  • University’s response to and resolution of external and internal audit findings and recommendations.
  • University’s compliance with pertinent laws, regulations, rules, policies, and standards of ethical conduct;
  • University’s identification and management of institutional risks;
  • University’s maintenance of an effective internal control framework;

AUTHORITY


The Committee has authority to investigate or conduct reviews of any matters within its scope of responsibility.  It is also specifically empowered to:

  • Approve auditing and permitted non-audit services performed by the University’s external audit firm, understanding that all such services must also be approved by the Colorado Office of the State Auditor.
  • Oversee the work of the external audit firm contracted by the Colorado Office of the State Auditor to conduct the University’s annual financial and compliance audit.  This external audit firm reports to both the Colorado Office of the State Auditor and to the Committee.
  • Resolve any disagreements between management and external auditors regarding financial reporting and compliance.
  • Retain accountants or other professionals to advise the Committee or to assist in the conduct of an investigation.
  • Seek any information it requires from University employees, all of whom are directed to cooperate with Committee requests.
  • Meet with University officers, external/internal auditors, or legal counsel, as necessary.
  • Forward to the Board of Trustees for consideration or action recommendations to provide direction to the President regarding financial reporting, compliance and institutional risks.
  • Carry out such other duties as may be assigned to the Committee by the Board of Trustees or Chairman.

COMPOSITION

  • The Committee will consist of at least three members of the Board of Trustees.
  • The Board of Trustees or its nominating committee will appoint Committee members and the Committee chair.

MEETINGS

  • The Committee will meet at least three times per year, with authority to convene additional meetings, as circumstances require. Additional meetings may be called by the Committee Chair or by the University President.
  • All Committee members are expected to attend each meeting, in person or via teleconference.
  • The Committee will invite members of management, external/internal auditors, or others to attend meetings and provide pertinent information, as necessary.
  • To the extent permitted by law, the Committee may conduct executive sessions.
  • Meeting agendas will be prepared and provided in advance to members, along with appropriate briefing materials.  Minutes will be prepared.

ROLE AND RESPONSIBILITIES


The Committee has the role and responsibilities set forth in this Charter.  It is not the Committee’s duty to plan or conduct audits or to determine that the University’s financial statements are complete, accurate, and in accordance with generally accepted accounting principles.  Management is responsible for the preparation, presentation and integrity of the University’s financial statements and for the appropriateness of the accounting principles and reporting policies used.  The external auditors are responsible for auditing the University’s financial statements.

Using guidance provided by the American Institute of Certified Public Accountants (AICPA) and (IIA), the Committee is responsible for completing duties included in the following areas:

Financial Statements

  • Review with management and external/internal auditors’ significant accounting and reporting issues, including complex or unusual transactions and recent professional and regulatory pronouncements, and understand their impact on the financial statements.
  • Review with management and the external auditors the results of the financial statement audit and annual financial report.  Consider whether the financial statements are complete, accurate, consistent with information known to Committee members, and reflect appropriate accounting principles.
  • Review legal, regulatory and compliance issues that may have a material impact on the University’s financial statements.
  • Understand how management develops interim financial information, and the nature and extent of external/internal auditor involvement. Review interim financial reports with management and external/internal auditors as appropriate. 

Internal Control and Compliance

  • With management, consider the effectiveness of the University’s internal controls, including those related to risk assessment, risk management, information technology security, confidential information, compliance and financial reporting.
  • Understand the scope of external/internal auditors’ review of internal controls.  Obtain reports on significant findings and recommendations, together with management’s responses.
  • Review the process for communicating the University’s Statement of Ethical Standards and Codes of Conduct.
  • Review the procedures for the confidential anonymous submission of complaints received by the University regarding questionable accounting, compliance or internal control matters.
  • Review significant risks or exposures facing the University with management and advise the Board of Trustees of such risks or exposures.

Internal Audit

  • Review the charter, activities, staffing, and organizational structure of the University’s internal audit function with management and the internal auditor.
  • Review and approve the annual internal audit plan and all major changes to the audit plan.
  • Ensure there are no unjustified restrictions or limitations on the internal audit function.
  • Review and make recommendations to the Board of Trustees on the appointment, replacement, reassignment or dismissal of the University’s internal auditor.

External Audit

  • Review and notify the Board of Trustees of the external auditor’s proposed audit scope, approach and findings.
  • Review the qualifications, independence and performance of the external auditors, and provide feedback to the Colorado Office of the State Auditor on their performance, including recommendations on the hiring or termination of the external auditors.

Other Responsibilities

  • Report to the Board of Trustees about committee activities, issues and related recommendations.
  • Perform other activities related to this charter as requested by the Board of Trustees.
  • Institute and oversee special investigations as necessary.
  • Periodically assess the adequacy of the Committee charter and review the effectiveness of the Committee.