HomeMy WebLinkAboutAUDIT COMMITTEE BYLAWS_202202111541ti� - j.b AUDIT COMMITTEE BYLAWS
The Council hereby constitutes and establishes an audit committee:
COMPOSITION:
The Committee shall be comprised of five members appointed by the
Council, two of whom are members of the Council Finance Committee,
and three (the independent members) who are independent of
management and the independent auditor. The independent members'
terms shall be three years and staggered so that the committee
annually includes a new independent member and independent members
with one and two years service. One independent member shall be
appointed chairman by the Council.
AUTHORITY AND RESPONSIBILITY:
The audit committee is to serve as a focal point for communication
between the Council, the independent auditor, internal auditor and
management, as their duties relate to financial accounting,
reporting, and internal controls and compliance. The audit
committee is to .assist the Council •in fulfilling its
responsibilities as to accounting policies and reporting practices
of the City of Caldwell and sufficiency of auditing relative
thereto. It is to be the Council's principal agent in assuring the
independence of the City of Caldwell's independent auditors, the
integrity of management and the adequacy of disclosures to the
public. The opportunity for the independent auditors to meet with
the entire Council as needed is not to be restricted, however. The
committee shall oversee and advise the Council and management on
the selection of independent auditors.
AUDIT COMMITTEE BYLAWS
The Audit Committee of the City of Caldwell- was established by
ordinance approved by the Council on � -(� ��i � The committee' s
operational guidelines are set down herein and may be amended,
after consultation with the Council, by a majority vote of the
independent members. The authority and responsibility of the audit
committee and the appointment and terms of members are designated
in the bylaws and are incorporated herein by reference.
MEETINGS:
The audit committee is to meet at
many times as the committee deems
ATTENDANCE:
least three times per year and as
necessary.
Members of the audit committee are to be present at all meetings.
As necessary or desirable, the chairman may request that members of
management, the director of internal audit and representatives of
the independent auditor be present at a meeting of the committee.
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MINUTES:
Minutes of each meeting are to be prepared and approved by the
committee members and provided to the Council. Approved minutes
are to be available for public inspection.
SPECIFIC DUTIES:
The audit committee is to:
1. Review with management, independent auditor and director of
internal audit the .City of Caldwell's policies and procedures
to reasonably assure the adequacy of internal controls over
accounting, administration, compliance with laws and
regulations and financial reporting.
2. Have familiarity, through the individual efforts of its
members, with the accounting and reporting principles and
practices applied by the City of Caldwell in preparing its
financial statements. Further, the committee is to make, or
cause to be made, all necessary inquiries of management and
the independent auditor concerning established standards of
conduct and performance, and deviations therefrom.
3. Review, prior to the annual audit, the scope and general
extent of the independent auditor's planned- examination,
including their engagement letter. The auditor's fees are to
be arranged with management and annually summarized for
committee review. The committee's review should entail an
understanding from the independent auditor of the factors
considered by the auditor in determining the audit scope,
including.
*Risk characteristics of the City of Caldwell
*External reporting requirements
*Materiality of the various segments of the City of Caldwell ' s
combined activities.
*Quality of internal accounting, administrative and compliance
controls.
*Extent of internal auditor's involvement in audit
examination.
*Other areas to be covered during the audit engagement:
I Review with management the extent of nonaudit services planned
to be provided by the independent auditor in relation to the
objectivity and independence needed in the audit.
5. Review with management and the independent auditor instances
where management has obtained "second opinions" on accounting
and financial reporting policies from other accountants.
6. Review with management and the independent auditor, upon
completion of their audit, financial results for the year
prior to their release to the public. This review is to
encompass.
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*The City of Caldwell's comprehensive annual financial report,
including the financial statements and financial statement and
supplemental disclosures required by GAAP.
*Significant transactions not a normal part of the City of
Caldwell's operations.
*Selection of and changes, if any, during the year in the City
of Caldwell's accounting principles of their application.
*Significant adjustments proposed by the independent auditor.
*The process used by management in formulating particularly
sensitive accounting estimates and the independent auditor's
conclusions regarding the reasonableness of those estimates.
*Any disagreements between the independent auditor and
management about matters that could be significant to the City
of Caldwell's financial statements or the auditor's report.
*Difficulties encountered in performance of the audit.
7. Evaluate the cooperation received by the independent auditor
during their audit, including their access to all requested
records, data and information. Also, elicit the comments of
management regarding the responsiveness of the independent
auditor to the City of Caldwell's needs. Inquire of the
independent auditor whether there have been any disagreements
with management that, if not satisfactorily resolved, would
have caused them to issue a nonstandard report on the City of
Caldwell's financial statements.
8. Discuss with the independent auditor the quality of the City
of Caldwell's financial and accounting personnel and any
recommendations that the independent auditor may have. Topics
to be considered during this discussion include improving
internal financial controls, controls over compliance, the
selection of accounting principles and management reporting
systems:
9. Review written responses of management to "letter of comments
and recommendations" from the independent auditor and discuss
with management the status of implementation of prior period
recommendations and corrective action plans.
10. Discuss with management the scope and quality of internal
accounting, administrative, compliance and financial reporting
controls in effect.
11. Apprise the Council, through minutes and special presentations
as necessary, of significant developments in the course of
performing the above duties.
12. Recommend to the council any appropriate extensions or changes
in the duties of the committee.
13. Recommend to the Council the retention or replacement of the
independent auditor, and provide a written summary of the
basis for the recommendations.
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14. Perform all of the.above duties wherever appropriate relative
to the City of Caldwell's component units. The Committee may
satisfy this duty by relying on the work of a component unit' s
audit committee.
15. Report annually to the Council on the discharge of these
responsibilities.
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