Board Policies

Appendix 8.5: Audit Committee Terms of Reference

Policy 8

1. Purpose

1.1.The purpose of the Audit Committee is to fulfill their oversight responsibility for reliable financial reporting, effective internal controls and compliance with legislation and regulatory requirements.

2. Powers and Duties

2.1. The Audit Committee has authority to conduct or authorize investigations into any matters within its scope of responsibility. It is empowered to:

2.1.1. With the consent of the Board, retain outside counsel, accountants or others to advise the committee or assist in the conduct of an investigation;

2.1.2. Seek any information it requires from employees – all of whom are directed to cooperate with the committee’s requests – or external parties;

2.1.3. Meet with Division officers, external auditors or outside counsel, as necessary; and

2.1.4. Make recommendations to the Board on budget development; financial control matters, and selection of external auditors.

3. The Audit Committee shall carry out the following responsibilities:

3.1. Financial Statements

3.1.1. Review significant accounting and reporting issues, including complex or unusual transactions;

3.1.2. Review with management and the auditors the results of the audit, including any difficulties encountered;

3.1.3. Review the annual financial statements, and consider whether they are complete, consistent with information known to committee members, and reflect appropriate accounting principles;

3.1.4. Review with management and the auditors all matters required to be communicated to the Board; and

3.1.5. Conduct a full review of Trustee compensation and expenditures with final recommendations presented to the Board for resolution prior to the end of June in an election year.

3.2. Budget Development

3.2.1. Review budget timelines and key budget assumptions;

3.2.2. Review a draft preliminary budget;

3.2.3. Review the governance budget; and

3.2.4. Provide recommendations to the Board.

3.3. Internal Control

3.3.1. Consider the effectiveness of the Division’s internal controls over annual reporting, including information technology security and control; and

3.3.2. Understand the scope of auditor’s review of internal control over financial reporting, and obtain reports on significant findings and recommendations, together with management’s responses.

3.4. Audit

3.4.1. Review the auditor’s proposed audit scope and approach;

3.4.2. Review the performance of the auditor(s) as deemed prudent to do so by the Committee, and provide a recommendation to the Board regarding final approval on the appointment of discharge of the auditors;

3.4.3. Review and confirm the independence of the auditors by obtaining statements from the auditors on relationships between the auditors and the Division, including non-audit services, and discussing the relationship with the auditors; and

3.4.4. On a needs basis, meet separately with the auditors to discuss any matters that the Audit Committee or auditors believe should be discussed privately.

3.5. Compliance

3.5.1. Review the findings of any examinations by regulatory agencies, and any audit observations; and

3.5.2. Obtain regular updates from management and company legal counsel regarding compliance matters.

4. Compensation shall be remunerated as follows:

4.1. Trustee members shall be compensated as specified in Policy 7 Appendix 7.3; and

4.2. The member at large shall be compensated at a rate of $228 per meeting and mileage to and from Audit Committee meetings as per Division practices.

5.Membership

5.1. The committee shall be made up of four (4) voting members and two (2) non-voting members.

5.2. A quorum is a simple majority of trustees.

5.3. Voting membership shall consist of:

5.3.1. Three (3) trustees, not to include the Board Chair, who are financially literate or willing to become so. One of the trustees shall be appointed Chair by the trustees on the committee.

5.3.2. One member at large, not connected with Parkland School Division or the external auditors. The member must be financially literate and preferably hold an accounting designation.

5.4. Non-voting members shall consist of:

5.4.1. The Superintendent; and

5.4.2. The Associate Superintendent of Corporate Supports and Services.

5.5. Resources to the Audit Committee:

5.5.1. The Director of Financial Services; and

5.5.2. Recording Secretary.

5.6. The Associate Superintendent and Director of Financial Services shall provide information and advice to the committee as requested.

6. Meetings

6.1.The Audit Committee shall meet at least four (4) times a year, with authority to convene additional meetings, as circumstances require.

6.2. Meetings shall be closed to the public.

6.3. The Audit Committee will invite members of management, auditors or others to attend meetings and provide pertinent information, as necessary. It may hold private meetings with auditors in executive sessions.