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Audit, Finance and Investment Committee Charter

LMC Revised Date

Office of Origin: Board of Trustees  
Date Adopted: 1/23/18
Date Reviewed: 1/23/18
Last Date Modified & Approved: 1/23/18

PURPOSE

The purpose of the Audit, Finance and Investment Committee (“Finance Committee”) is to assist the Board of Trustees (“Board”) in fulfilling its oversight responsibilities for the College’s:

  • financial and tax reporting processes,
  • system of internal control,
  • compliance with financial regulations, and
  • external audit processes.

The Finance Committee also provides an open avenue of communication between the Board and external auditors, the President, and the Chief Financial Officer. 

COMPOSITION

The Finance Committee will consist of three members of the Board.  The Board will appoint Finance Committee members annually.  Each Finance Committee member will be financially literate.  The Chair of the Finance Committee will be the Treasurer of the Board. 

MEETINGS

The Finance Committee will meet at least two times a year, with authority to convene additional meetings as circumstances require.  During at least one of these meetings, the Finance Committee will hold a private meeting with the external auditor partner to gain insight into matters under the Finance Committee’s purview. 

The Finance Committee will invite members of management, auditors, and/or others to attend meetings and/or provide pertinent information, as necessary.

The Finance Committee shall keep minutes of all of its meetings. 

RESPONSIBILITIES

The responsibilities of the Finance Committee include reviewing and understanding the following areas related to financial oversight and governance: 

  1. The College’s financial condition, capital investment plans, financing plans, investment holdings, borrowing and investment policies, annual operating and capital budgets, and financial reporting practices.
  2. The quality and integrity of the College’s accounting, financial reporting, and compliance practices related to financial matters.
  3. The integrity of the College’s annual financial statements and performance of external auditors.
  4. Results of investigation and evaluation of serious allegations of financial misconduct or conflict of interest. 
  5. The adequacy of the College’s general liability and package insurance coverages.

DUTIES

The duties of the Finance Committee include, but are not limited to, the following:

  1. Review of the annual audited financial statements with management and external auditors.
  2. Review of the annual reports and schedules required by OMB Circular A-133 with management and the external auditors.
  3. Review of all matters required to be communicated to those in governance under generally accepted auditing standards with management and the external auditors.
  4. Review of external auditor reports on significant findings and recommendations as well as any other internal control or other recommendations.
  5. Discussion of risk with management and external auditors, including major risk exposures and steps taken, or recommended to be taken, to monitor or mitigate such exposures.
  6. Review of the annual tax filings with the Internal Revenue Service before their filing (i.e., Form 990 Return of Organization Exempt from Income Tax and Form 990T Exempt Organization Business Income Tax Return.
  7. Reporting to the Board of Finance Committee activities, issues, and recommendations.
  8. Review and investigation of any significant matters pertaining to the integrity of management, including conflicts of interest and adherence to standards of business conduct as required in the policies of the College.
  9. Periodic review of the adequacy of the general liability and package insurance coverages.
  10. Periodic review of investment holdings and the returns on such.

Responsibility:  Secretary to the Board of Trustees

References:  Lake Michigan College Investigation policy

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