Appendix 14-Audit Committee Charter9-21-09
5 Pages
English
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Appendix 14-Audit Committee Charter9-21-09

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Learn all about the services we offer
5 Pages
English

Description

APPENDIX 14 KENTUCKY TEACHERS’ RETIREMENT SYSTEM Governance and Audit Committee Charters of the Governance and Audit Committee Purpose The Governance and Audit Committee is a committee of the Board of Trustees of the Kentucky Teachers’ Retirement System. The Committee is established to assist the Board of Trustees in fulfilling its fiduciary oversight responsibilities for Retirement System’s governance process, financial reporting process, system of risk management, system of internal control, internal and external audit process, and the process of monitoring compliance with laws and regulations. Authority The Committee has authority for matters within its scope of responsibility for the following functions: Governance Process Financial Reporting Process System of Risk Management System of Internal Controls Internal and External Audit Monitoring Compliance with Laws and Regulations Audit Committee Management and Reporting Composition The Committee will be composed of a minimum of three (3) members of the Board of Trustees. The Chair of the Board will appoint the Committee members and the Committee chair. The Chair of the Board should endeavor to appoint at least one member with an understanding of generally accepted accounting principles and financial statements; experience in the preparation or auditing of financial statements; experience with internal accounting controls; and an understanding of audit committee ...

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APPENDIX 14
KENTUCKY TEACHERS’ RETIREMENT SYSTEM
Governance and Audit Committee
Charters of the Governance and Audit Committee
Adopted August 28, 2009
Page 1 of 2
Purpose
The Governance and Audit Committee is a committee of the Board of Trustees of the
Kentucky Teachers’ Retirement System.
The Committee is established to assist the Board
of Trustees in fulfilling its fiduciary oversight responsibilities for Retirement System’s
governance process, financial reporting process, system of risk management, system of
internal control, internal and external audit process, and the process of monitoring
compliance with laws and regulations
.
Authority
The Committee has authority for matters within its scope of responsibility for the following
functions:
Governance Process
Financial Reporting Process
System of Risk Management
System of Internal Controls
Internal and External Audit
Monitoring Compliance with Laws and Regulations
Audit Committee Management and Reporting
Composition
The Committee will be composed of a minimum of three (3) members of the Board of
Trustees.
The Chair of the Board will appoint the Committee members and the Committee
chair.
The Chair of the Board should endeavor to appoint at least one member with an
understanding of generally accepted accounting principles and financial statements;
experience in the preparation or auditing of financial statements; experience with internal
accounting controls; and an understanding of audit committee functions.
Meetings
The Committee will meet at least twice each year (December to review the external audit
report, and July to review the internal audit plan), with authority to convene additional
meetings, as circumstances require. All Committee members are expected to attend each
meeting.
The Committee will invite members of management, auditors, and/or others to
attend meetings and provide pertinent information, as necessary. Subject to open meeting
laws, the Committee may hold executive sessions and private meetings with auditors.
Meeting agendas will be prepared and provided in advance to members, along with
appropriate briefing materials.
Minutes of each meeting will be prepared.
Adopted August 28, 2009
Page 1 of 3
APPENDIX 14
KENTUCKY TEACHERS’ RETIREMENT SYSTEM
Governance and Audit Committee
Charter of the Office of Internal Audit
Mission and Scope of Work
The mission of internal audit is to provide independent, objective assurance and consulting
services designed to add value and improve the Retirement System’s operations. Internal audit
helps the Retirement System accomplish its objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectiveness of risk management, control, and governance
processes.
The scope of work of internal audit is to determine whether the Retirement System’s network of
risk management, control, and governance processes, as designed and represented by
management, are adequate and functioning in a manner to ensure:
Risks are appropriately identified and managed.
Interaction with various employees and others occur as needed.
Significant financial, managerial, and operating information is accurate, reliable, and
timely.
Employees’ actions are in compliance with policies, standards, procedures, and
applicable laws and regulations.
Resources are acquired economically, used efficiently, and adequately protected.
Programs, plans, and objectives are achieved.
Quality and continuous improvement are fostered in the Retirement System’s control
process.
Significant legislative or regulatory issues impacting the organization are recognized and
addressed appropriately.
Opportunities for improving management control may be identified during audits. They will be
communicated to the Executive Secretary and the appropriate lower levels of management.
Accountability
The director of internal audit, in the discharge of his/her duties, shall be accountable to
management and the Committee to:
Provide annually an assessment on the adequacy and effectiveness of the Retirement
System’s processes for managing its risks and controlling its activities in the areas set
forth under the mission and scope of work.
Report important issues related to the processes for controlling the activities of the
Retirement System, including potential improvements to those processes, and provide
information concerning such issues through resolution.
Periodically provide information on the status and results of the annual audit plan and the
sufficiency of internal auditing resources.
Adopted August 28, 2009
Page 2 of 3
Coordinate with other control and monitoring functions (risk management, compliance,
security, legal, ethics, environmental, external audit).
Establish a follow-up process to track actions related to important issues and
recommendations.
Independence
The director of internal audit reports administratively and functionally to the Executive
Secretary.
However, to provide for the independence of internal auditing, the director of internal
audit shall also provide summaries of significant audit reports to the Committee and develop the
annual audit plan in consultation with the Committee.
Responsibility
The director of internal audit has the responsibility to:
Develop a flexible annual audit plan using appropriate risk-based methods, including any
risks or control concerns identified by management, and submit that plan to the
Committee for review and approval as well as periodic updates.
Implement the annual audit plan, as approved, including as appropriate any special tasks
or projects requested by the Executive Secretary and the Committee.
Evaluate and assess important merging/consolidating functions and new or changing
services, processes, operations, and control processes coincident with their development,
implementation, and/or expansion.
Issue periodic reports to the Committee and management summarizing results of audit
activities.
Keep the Committee informed of emerging trends and successful practices in internal
auditing.
Consider the scope of work of the external auditors and regulators, as appropriate, for the
purpose of providing optimal audit coverage to the Retirement System at a reasonable
overall cost.
As appropriate, provide consulting and advisory services to management that add value
and improve the Retirement System’s governanace, risk management, and control
processes without the internal auditor assuming management responsibility.
Establish a quality assurance and improvement program by which the director of internal
audit assures effective operation of internal audit activities.
Authority
The director of internal audit and staff of the internal audit office are authorized to:
Have full, free, and unrestricted access to all functions, records, property, and personnel.
Have full and free access to the Committee.
Allocate resources, set frequencies, select subjects, determine scopes of work, and apply
the techniques required to accomplish internal audit objectives.
Obtain the necessary assistance of personnel in units of the organization where they
perform audits, as well as other specialized services from within or outside the
Retirement System.
Perform consulting services to management as deemed appropriate by the Executive
Secretary.
Adopted August 28, 2009
Page 3 of 3
The director of internal audit and staff of the internal audit office are not authorized to:
Perform any operational duties for the Retirement System.
Initiate or approve accounting transactions external to the internal audit office.
Direct the activities of any Retirement System employee not employed by the internal
audit office, except to the extent such employees have been appropriately assigned to
audit teams or to otherwise assist the internal auditors.
Standards of Audit Practice
The internal audit office will consider standards of professional practice outlined by the IIA,
AICPA, and APPFA in executing the duties set forth in this charter.
APPENDIX 14
KENTUCKY TEACHERS’ RETIREMENT SYSTEM
Governance and Audit Committee
Charters of the Governance and Audit Committee
Adopted August 28, 2009
Page 2 of 2
Responsibilities
The Committee will have responsibility for providing policy recommendations to the Board
of Trustees for the following:
1.
The assessment of governance process.
2.
The integrity of financial information reporting.
3.
The policy and framework for an effective system of risk management and the
mechanisms for periodic assessment of the system of risk management.
4.
The assessment of internal administrative and accounting controls by both the
external and internal auditors.
5.
The policy and framework for an effective system of internal controls and the
mechanisms for periodic assessment of the system of internal controls.
6.
Reviewing with management and the director of internal audit the objectives, plans,
activities, staffing and organizational structure of the internal audit function.
7.
Reviewing the effectiveness of the system of monitoring and compliance with
applicable statutes, regulations and policies.
8.
Reporting to the Board of Trustees on significant activities, findings and
recommendations of the Committee.