City of McLendon-Chisholm Audit Committee Charter
The Audit Committee (the “Committee”) shall provide guidance to the City Council with respect to oversight for financial reporting, internal controls and auditing activities. The Committee shall not have direct authority or responsibility over any such matters, but may vote to recommend that the City Council take certain actions, or recommend that the City Council direct the Mayor to take certain actions. The City Council may refer appropriate matters for review by the Committee, but the Committee’s review of such matters shall be purely advisory and discretionary in nature. Committee members shall make all requests and direct all inquiries to the Mayor, or other designated City official assigned as staff liaison for the Committee and shall not give orders or directions to any other administrative staff.
The Committee shall have no responsibility for (a) the accuracy of any audit documents, financial statements or any other accounting documents or transactions provided to the City by accounting professionals or City staff, regardless of the Committee’s involvement – or lack of involvement – in the preparation, review or recommendation relating to any such documents or statements, (b) the City’s implementation of or compliance with any recommendation of the Committee or its accounting professionals or (c) accounting policies and practices of the City and its accounting professionals. Unless otherwise indicated below or specifically requested by the City Council, the Committee may perform or undertake the following tasks as the Committee determines, in its sole discretion, to be necessary. The performance, means and manner of performance, outcome and recommendation, if any, of or relating to each and every one of these tasks is a matter of discretion of the Committee and within the scope of the Committee’s authority. Any of these tasks performed by the Committee shall be performed in good faith.
1. Annually review and make recommendations with respect to the appointment of the independent auditors and the related audit fees. Review and evaluate the performance of the independent auditors and make related recommendations to the City Council.
2. Make recommendations as to the necessity of employment of audit firms other than the principal independent auditors for services that the City or the independent auditor determines would not be appropriate for the independent auditor to perform.
3. Annually review with the independent auditor, the Mayor, the City Administrator’s Office, the audit scope and plan. Address the coordination of audit efforts to assure the completeness of coverage, reduction of redundant efforts, and the effective use of audit resources.
4. Review with the Mayor, City Administrator and the independent auditors:
· The City’s annual financial statements, related footnotes, and management’s discussion and analysis.
· The independent auditors’ audit of the financial statements and their report thereon.
· The independent auditors’ judgments about the quality, not just the acceptability, of the City’s accounting principles as applied in its financial reporting.
· The independent auditors’ single audit of the federal awards administered by the City and their reports thereon.
· Any significant changes required in the independent auditors’ audit plan.
5. Review with the City Attorney and the City Auditor legal and regulatory matters that, in the opinion of the Mayor and City Administrator’s Office, may have a material impact on the financial statements and compliance with federal, state, and local laws and regulations.
6. Review the City financial statements on a quarterly basis for the purpose of identifying issues of significant financial risk or exposure to the City.
7. Review with the independent auditor that performs the financial statement audit:
· All critical accounting policies and practices used by the City.
· All alternative treatments of financial information within generally accepted accounting principles that have been discussed with the City’s staff, the ramifications of each alternative, and the treatment preferred by the City.
8. Review with the independent auditors, the Mayor, and the City Administrator:
· The adequacy of the City’s internal controls, including but not limited to, computerized information system controls and security, cash handling, credit card transactions and electronic funds transfers
· Any related significant findings and recommendations of the independent auditors.
· The effect of any regulatory and accounting initiatives, such as related organizations financing structures, derivatives, or securities lending.
9. Review the policies and procedures with respect to the City’s elected officials and appointed officers, including the use of expense accounts, public monies, and public property. Consider the results of any review of these areas by the City Auditor or the independent auditors.
10. Annually review the City’s Financial Management Policy Statements and the City’s Investment Policy for revisions and annual adoption by the City Council.
11. Inquire of the Mayor, City Administrator, and the independent auditors about significant risks or exposures facing the City; assess the steps management has taken or proposes to take to minimize such risks and periodically review compliance with such steps.
12. Periodically review the City’s Code of Ethics to ensure that it is adequate and up-to-date.
13. Review with the City Auditor and the City Attorney the results of the Committee’s review of compliance monitoring with the Code of Ethics.
14. Review the procedures for the receipt, retention, and treatment of complaints received by the City regarding accounting, internal accounting controls, auditing matters, or suspected fraud that may be submitted by any party, internal or external to the organization. Review any complaints that might have been received, current status, and resolution if one has been reached.
15. Review procedures for the confidential, anonymous submission by the City’s employees of concerns regarding questionable accounting or auditing matters, or suspected fraud. Review any submissions that have been received, the current status, and the resolution if one has been reached.
16. Review the Committee’s own effectiveness as necessary, and make recommendations to the City Council regarding desired changes to this Charter.