Audit Committee Charter

THE CALIFORNIA STATE UNIVERSITY
​AUDIT COMMITTEE CHARTER

Purpose

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

Composition and Meetings

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.

Responsibility and Authority

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, and resolve disagreements between management and the external auditor regarding financial reporting. The Chair of the Committee on Audit shall approve any non-audit services provided by the external auditor, except for tax services and other required tasks (as stipulated in the external auditor's services contract), to ensure they do not create a conflict of interest under the Government Accountability Office (GAO) independence standards. All non-audit engagements shall be reported annually to the Committee on Audit.
2. Approve the results of the annual financial audit with the external auditor and management and monitor the completion of recommendations. Review with the independent auditor matters required to be discussed under external auditing standards.
3. Monitor the university's system of internal controls, including 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 and priority of work assignments with the Vice Chancellor and Chief Audit Officer and management, and approve the final audit plan. Material changes to the audit plan must be approved by the Chair of the Committee on Audit.
5. Review internal audit reports and responses and monitor the completion of recommendations.
6. Approve the internal audit charter and other governance documents related to internal audit activities of the California State University, and periodically review the Audit and Advisory Services and Committee on Audit charters with the Vice Chancellor and Chief Audit Officer and senior management to consider other topics that should be included in the charter to enable an effective internal audit function.
7. Discuss with the Vice Chancellor and Chief Audit Officer and senior management the appropriate authority, role, and responsibilities of Audit and Advisory Services and assure the effectiveness of the internal audit function, including its organizational structure, adequacy of staffing and budget, and performance relative to its annual plan, and ensure there are no unjustified restrictions or limitations or impairments.
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 an independent consultant to assist with the evaluation. The Committee on Audit will discuss performance expectations and the results of the appraisal with the Vice Chancellor and Chief Audit Officer in closed session.​
   
9. Make recommendations to the Board of Trustees for the appointment, dismissal, and compensation of the Vice Chancellor and Chief Audit Officer.
10. Support the Vice Chancellor and Chief Audit Officer through regular, direct communications, and ensure the Vice Chancellor and Chief Audit Officer has unrestricted access to communicate and interact directly with members of the Committee on Audit in accordance with open meeting requirements.
11. Ensure a quality assurance and improvement program has been established for Audit and Advisory Services in accordance with professional audit standards, and review the results annually.