Audit Committee Charter

RESOLVED, By the Board of Trustees of the California State University, that the following updated Charter for the Committee on Audit is adopted.

The purpose of the Committee on Audit is to assist the Trustees in fulfilling its oversight responsibilities for the financial reporting process, system of internal control over financial reporting, external and internal audit processes, and the university's process for monitoring compliance with laws and regulations.

The Committee on Audit will consist of at least five members as determined by the Trustees through the Committee on Committees. Each committee member will be independent. Members will have access to financial expertise either collectively among committee members or from a financial expert appointed to advise them. Regular meetings of the Committee on Audit will be held on the same dates and in the same locations as regular meetings of the Trustees. Other meetings may be called as provided for in the Rules Governing the Board of Trustees.

The Committee on Audit functions under the Rules Governing the Board of Trustees and is responsible for the overall audit function within the California State University. In this context, the Committee on Audit shall:

1. Approve the selection or discharge of the external auditor, review the external auditors' planned audit scope and approach, approve any non-audit services provided by the external auditor, and resolve disagreements between management and the external auditor regarding financial reporting.
2. Review the results of the annual financial audit with the external auditor and management, including any difficulties encountered, and monitor the completion of recommendations.
3. Monitor the university's system of internal controls, including computerized information system controls and security; the adequacy of financial, accounting and operational policies and practices related to financial reporting; and the process for monitoring compliance with laws and regulations.
4. Review the annual internal audit plan, discuss the extent to which it addresses high-risk areas with the Vice Chancellor and Chief Audit Officer and management, and approve the final audit plan and all major changes to the plan.
5. Review internal audit reports and responses, and monitor the completion of recommendations.
6. Approve the internal audit mission statement, charter, and other governance documents related to internal audit activities in the University.
7. Assure the effectiveness of the internal audit function, including its organizational structure, adequacy of staffing and budget, performance relative to its annual plan; and ensure there are no unjustified restrictions or limitations.
8. Call for the review of the Vice Chancellor and Chief Audit Officer, not less than once every three years, and provide input to the Board of Trustees on the Vice Chancellor and Chief Audit Officer’s performance. At its discretion, the Committee may retain outside consultants to assist with the review.
9. Make recommendations to the Board of Trustees for the appointment, dismissal and compensation of the Vice Chancellor and Chief Audit Officer.