Policy 1.091

Audit Committee

The School Board has created an Audit Committee, which is an advisory committee to the Board. The Committee shall be governed by its charter, as set forth herein.

1. Authority

1. Primary responsibility for the District's financial reporting and internal operating controls is vested in senior operating management as overseen by the School Board. The Audit Committee is advisory only, and has been created consistent with Policy 1.09, "Advisory Committees to the Board," for purposes of providing advice to the School Board and providing guidance and assistance to the District Auditor. The District Auditor shall report to the School Board.

2. Whenever a recommendation of the Committee on a substantive issue is reported to the School Board and the recommendation was not unanimous, the basis for the majority and minority positions should be brought to the attention of the School Board.

3. The Audit Committee shall be appointed by the School Board from nominations by School Board members (one appointee per Board member) and will be composed of seven (7) voting members from the community and six (6) non-voting ex-officio members. The non-voting ex-officio members shall include: two School Board members, the Superintendent/designee, Chief Counsel to the School Board/designee (solely to provide legal advice), the President of the Classroom Teachers Association, and a representative from the District's school principals.

4. In nominating individuals to serve on the Audit Committee, School Board members are encouraged to take into consideration representation from various racial and ethnic groups and professionals with a background in accounting, finance, or business.

5. The terms of community members nominated by School Board members shall be consistent with the terms of their respective nominating School Board members, unless the nominating School Board member exercises his/her discretion to remove the Committee member. The terms of ex-officio members shall be consistent with their term of service in the position which qualified them to serve ex-officio on the Audit Committee.

6. The Committee shall elect a Chair and a Vice Chair from among the seven community members. All Committee members serve in a voluntary capacity and shall be residents of Palm Beach County. Community members will be removed automatically should they miss three (3) consecutive regular meetings without good cause.

7. Committee members, and/or their company(ies) in which the members have a direct financial interest, shall not do business with the District during the members' term, in accordance with § 112.313, Fla. Stat., and pertinent Opinions of the Florida Commission on Ethics.

8. The School Board will reasonably provide adequate support to the Audit Committee to discharge its responsibilities. The Board, with the advice and counsel of the Audit Committee, shall ensure that the auditors have unrestricted reasonable access to District personnel and public documents. The management shall cooperate with the Committee in promoting the use of the internal audit as a constructive process. Committee activities shall be reported to the School Board on a regular basis.

2. Responsibilities

1. Meetings.-- The Audit Committee will meet on a regular basis and call special meetings as required with proper notice. Four (4) voting members shall constitute a quorum. Audit Committee meetings are to be conducted under Robert's Rule of Order Newly Revised. All Committee and subcommittee meetings are governed by the Sunshine Law as required by Chapter 286, Fla. Stat.

2. Management Accountability

1. The responsibility of the Audit Committee in the area of financial reporting is to review interim financial statements, annual financial statements, and the District's annual management letter, and assist the Board in interpreting these documents.

2. Specific responsibilities of the Audit Committee shall include, but not be limited to: nominating external auditors; reviewing auditor engagement letters; coordinating with the District's chief financial officer in overseeing the audits by external auditors; arranging for periodic reports from management, the external auditors, and the District Auditor to assess the impact of significant regulatory changes and accounting or reporting developments; reviewing external auditors' performance; reviewing management letters and auditor's opinions; reviewing and monitoring implementation of management's response to auditors' recommendations; reviewing and recommending to the Board any necessary changes to the Audit Committee charter or Internal Audit procedures as set forth in Policies 1.091 and 1.092; and recommending an annual audit plan to the School Board.

3. District Governance

1. The Audit Committee is to provide assurance that the District is in compliance with pertinent laws and regulations relating to accounting and financial matters; is operating in accordance with sound business practices; is conducting its affairs ethically; maintains effective controls against employee conflict of interest, errors and fraud; and provides accurate and complete financial disclosure.

2. Among other responsibilities, the Committee shall provide input to the Board in the Board's performance evaluations of the District Auditor, whose written evaluations will be kept on file pursuant to Fla. Stat. § 231.291.

3. The Audit Committee may review and make recommendations on any proposed disciplinary action upon, or termination of the employment of, the District Auditor. In the event of a vacancy in the position of District Auditor, the Audit Committee should review the applicants and provide its recommendations to the School Board regarding selection. 

3. Internal Control.-- The responsibility of developing and implementing adequate internal control rests with the management of the District. The Audit Committee must fulfill its internal control oversight responsibilities, through the District Auditor, without unnecessary or inappropriate intervention in the prerogatives of District management. Nevertheless, to carry out its responsibility, the Audit Committee must, among other actions, assist in determining if any restrictions have been placed by management on the scope of independent auditors' examinations. The Committee should review the results of each peer review of the Office of District Auditor and discuss the nature of any corrective measures. The District Auditor shall also coordinate with the Chief Counsel to the School Board and the School Police Chief in special investigations into significant matters.

4. Duration of Charter.-- The Audit Committee's charter shall remain in effect until repealed or amended by the Board following appropriate procedures. The Board may modify or terminate the charter with stated cause.

Pages 1.091(a) - 1.091(c)