The Audit Committee of the Corporation has oversight responsibility for monitoring: the integrity of the financial statements of Brown University and its subsidiaries, affiliates, and departments; compliance by the University with legal and regulatory requirements and policies of the Corporation; the adequacy of the University's systems of internal control and risk management practices; and the independence and performance of the University's internal and external auditors.
The Committee shall consist of no fewer than five members of the Corporation and the Treasurer, ex officio, each of whom must be independent of the Administration, as well as the University and each of its affiliates. At least one member of the Committee shall have accounting or related financial management expertise, as the Corporation interprets such qualification in its judgment.
The Committee shall meet at least three times a year, with authority to convene additional meetings, as circumstances require. All Committee members are expected to attend each meeting, in person or via teleconference or videoconference. Meeting agendas shall be prepared and provided in advance to members, along with appropriate briefing materials. Minutes shall be prepared.
The Committee shall meet at least annually with the Administration, the senior internal auditing executive, and the external auditors in executive session to discuss any matters that the Committee or any of these groups believes should be discussed privately.
Responsibilities and Duties
The Committee's specific responsibilities are as follows:
- The Committee shall have unrestricted access to members of the Administration and other employees of the University, as well as all information relevant to the carrying out of its responsibilities. The Committee shall have the power to conduct or authorize investigations into any matters within the Committee's scope of responsibilities.
- The Committee shall, with the assistance of the Administration, the external auditors and legal counsel, as the Committee deems appropriate, review and evaluate the Committee's: charter; powers and responsibilities; and performance.
- The Committee shall be empowered to retain, at the University's expense, independent counsel, accountants or others for such purposes as the Committee, in its sole discretion, determines to be appropriate to carry out its responsibilities.
B. Internal Controls
- The Committee shall review at least annually, with the Administration, internal audit and the external auditors, and if deemed appropriate by the Committee, the effectiveness of or weaknesses in the University's internal controls, including computerized information system controls and security, the overall control environment and accounting and financial controls.
- The Committee shall obtain from the external auditors their recommendations regarding internal controls and other matters relating to the accounting procedures and the books and records of the University and review the correction of controls deemed to be deficient.
- The Committee shall review:
- the appointment, performance and replacement of the senior internal auditing executive, and the activities, organizational structure and qualifications of the persons responsible for the internal audit function;
- the internal audit plan, staffing and budget; and
- material findings of internal audit reviews and the Administration’s response, including any significant changes required in the internal auditor’s audit plan or scope and any material difficulties or disputes with the Administration encountered during the course of the audit.
- The Committee shall review the Administration's procedures for the receipt, retention and treatment of complaints received by the University regarding accounting, internal accounting controls or auditing matters.
C. Financial Reporting
- The external auditors ultimately shall be accountable to the University and the Committee. The Committee shall evaluate and recommend to the University the selection and, where appropriate, the replacement of the external auditors.
- The Committee shall:
- review the scope, plan and procedures to be used on the annual audit, as recommended by the external auditors;
- review the results of the annual audits and interim financial reviews performed by the auditors;
- review and discuss the existence of significant estimates and judgments underlying the financial statements, (including investment valuations and receivables collectability); and
- review the Form 990.
D. Compliance with Laws, Regulations and Policies
- The Committee shall review with the Administration actions taken to ensure compliance with applicable laws and regulations, as well as policies which may be established by the Corporation.
- The Committee shall review with the University's legal counsel any legal compliance matters that are material to the University.
- The Committee shall periodically review the University's code of conduct/ethics to ensure that it is adequate and current.
E. Risk Management
- The Committee shall review major financial risk exposures and the guidelines and policies which the Administration has put in place to govern the process for monitoring, controlling and reporting such financial risk exposures.
- The Committee reviews the University's process for identifying, assessing, mitigating, monitoring, and reporting key risks that might impair the achievement of Brown's strategic goals and objectives.
- The Committee shall monitor the Administration's progress with respect to risk identification, prioritization, assessment, action plans and monitoring.
F. Annual-Self Assessment of Committee Performance
The Committee shall conduct a self-assessment of its performance on an annual basis.
The Committee shall be staffed by the Executive Vice President for Finance and Administration and the University Auditor.