[HISTORY: Adopted by the Town Council of the Town of New
Canaan 5-21-2014; amended 1-20-2016. Subsequent
amendments noted where applicable.]
As used in this chapter, the following terms shall have the
meanings indicated:
An individual who has substantial audit experience in the
corporate or government sectors and who possesses or obtains a basic
understanding of governmental financial reporting and auditing.
Any Town officer or employee of the Town or Board of Education.
Collectively, the Town Council, the Board of Selectmen, the
Board of Finance and the Board of Education.
There shall be an Audit Committee of five members who shall
be electors of the Town and who shall each be a "financial expert."
The members shall serve without compensation and shall hold no other
office of trust or emolument in the Town government or serve on any
other committees of the Town government. No member may accept any
consulting, advisory or other compensatory fee from the Town, nor
shall a member have had any material financial relationship (i.e.,
any transaction involving $5,000 or more in any year) with the Town
in the three years prior to appointment to the Committee.
A.
The Board of Selectmen shall appoint members of the Committee for
a term of three years to begin on December 1 each year, with two members
to be appointed the first year, two members to be appointed the second
year, and one member to be appointed the third year, so as to have
staggered terms. Members may serve for no more than three successive
three-year terms or part thereof.
B.
Each member, after qualification, shall hold office from their initial
appointment and until a successor has been appointed and shall have
qualified. In the event of a vacancy due to death, resignation or
removal, within 60 days of such vacancy the Selectmen will appoint
a successor member of the Committee. There shall be minority representation
on the Committee in accordance with § 9-167a of the General
Statutes. No appointment to the Committee, for a full term or to fill
a vacancy, shall be effective unless confirmed by an affirmative vote
of seven members of the Town Council.
A.
On or promptly after the first day of December in each year the Audit
Committee shall meet at the call of the First Selectman to choose
one of its members to be Chairman and one of its members to be Secretary.
The Chairman shall, when present, preside at all meetings of the Committee
and shall have a vote as a member thereof. In the absence of the Chairman
or Secretary, as the case may be, the Committee shall choose one of
its members Chairman pro tempore or one of its members Secretary pro
tempore. Three members shall be a quorum for the transaction of business
at any meeting.
B.
The Secretary shall file in the office of the Town Clerk agendas
and minutes of all meetings of the Committee, including the votes
of each member on all actions taken.
C.
The Committee shall prepare and send an annual report of its activities
to the Town Bodies within 60 days after filing of the financial statements
with the State Office of Policy and Management.
D.
The Committee shall have full authority:
(1)
To investigate any matters directly related to the purposes of the
Committee, on its own motion or brought to its attention with full
access to all books, records (except such records that are confidential
under state or federal law), facilities and personnel of the Town
and Board of Education; and
(2)
To request any officer or employee of the Town and Board of Education,
the Town's and Board of Education's legal counsel, internal auditor,
independent auditors or other consultants, upon reasonable notice,
to attend a meeting of the Committee or to meet with any members of,
or consultants to, the Committee.
A.
The purpose of the Audit Committee is to assist the Town Bodies in
fulfilling the Town Bodies' respective oversight responsibilities
relating to: 1) the integrity of the Town's financial statements,
financial reporting processes and systems of internal accounting and
controls; 2) the annual independent audit of the Town's financial
statements, the engagement of the independent auditors and the evaluation
of the independent auditors' qualifications, independence and performance;
3) compliance with legal and regulatory requirements that could materially
impact the Town's financial statements; 4) the evaluation of enterprise
risk issues; and 5) overseeing the Town's plan for corrective action
which should include appropriate and timely follow-up measures. In
performing the Committee's duties, members may reasonably rely upon
management to prepare financial statements in accordance with applicable
standards and to maintain an effective system of internal controls
that provide reasonable assurances regarding the reliability of financial
reporting.
B.
Acting as an ad hoc committee with the First Selectman and the Chairman of the Town Council, the members of the Committee shall recommend to the Town Council annually one or more independent accounting firms qualified to perform the annual audit of the Town (See Town Charter § C5-27, System of Accounting). The ad hoc committee shall review and recommend to the Town Council the fees to be paid to the independent auditors, including in connection with any non-audit services. The ad hoc committee shall oversee, evaluate and, where appropriate, recommend to the Town Council the replacement of the independent auditors.
C.
The Committee shall receive reports, from time to time, from the
independent auditors regarding their independence, and shall discuss
such reports with the auditors, if necessary, to satisfy itself of
the independence of the auditors.
D.
The Committee shall meet with the independent auditors during the
annual audit period to discuss the overall scope of the audit plan,
including the adequacy of staffing and other factors that may affect
the effectiveness and timeliness of the audit. The Committee shall
also discuss with management and the independent auditors the Town's
risk exposures (whether financial, operating or other), the adequacy
and effectiveness of the accounting and financial controls, and the
steps management has taken to monitor and control such exposures and
manage legal compliance programs, among other relevant considerations.
E.
The Committee shall review with management and the independent auditors
the annual financial statements of the Town, including the reasonableness
of significant judgments, the clarity of the disclosures in the financial
statements and the adequacy of internal controls. Based on such review
and discussion, the Committee shall make a determination whether to
recommend to the Town Council the acceptance of the audited financial
statements. In addition, the Committee may make recommendations, if
any, to the Town Bodies regarding the following: i) Annual audited
financial statements; ii) Management letter submitted by the independent
auditor; iii) Response to the management letter submitted by Town
CFO/BoE Finance Director; and iv) Financial management policies. The
Committee shall review periodically with management and the independent
auditors the effect of new or proposed regulatory and accounting initiatives
on the Town's financial statements.
F.
The Committee shall meet with the independent auditors to discuss
any problems or difficulties the auditors may have encountered in
connection with the annual audit or otherwise and any management letter
provided by the auditors and the Town's response to that letter. Such
meeting shall address any difficulties encountered in the course of
the audit work, including any restrictions on the scope of activities
or access to required information, any disagreements with management
regarding generally accepted accounting principles and other matters,
material adjustments to the financial statements recommended by the
independent auditors and adjustments that were proposed but passed
regardless of materiality.
