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Charter of Audit Committee ao 5 07 (REB0974DOC;1)

By Glenn Morales,2014-05-15 16:42
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Charter of Audit Committee ao 5 07 (REB0974DOC;1)

    The Metropolitan Transportation Authority

    AUDIT COMMITTEE

This Charter for the Audit Committee was adopted by the Board Chair and a majority of

    the members of the Metropolitan Transportation Authority, a public benefit corporation

    established under the laws of the State of New York (together with any other entity or

    corporation for which the members of the Metropolitan Transportation Authority serve as

    a board of directors, the “MTA”), on the 29th day of July, 2004, and was amended on the th17 day of December, 2008.

    I. PURPOSE

    The Audit Committee (the “Committee”) shall assist and provide guidance to the Board

    Chair and the Board in monitoring and overseeing (a) the conduct of the MTA’s financial reporting process, the application of accounting principles, and the engagement of the

    MTA’s outside accountants; (b) the MTA’s internal controls and risk management

    systems; and (c) general matters relating to legal, regulatory and ethical compliance at the

    MTA.

    II. COMMITTEE AUTHORITY

    The Committee’s role is one of oversight. In carrying out this oversight function, the

    chairperson of the Committee (the “Committee Chair”) and the vice-chairperson of the

    Committee (the “Committee Vice-Chair”) shall have additional responsibilities, as set

    forth in Section VI of this Charter. The Committee Chair and/or the Committee Vice-

    Chair regularly shall report to the entire Committee their findings with respect to these

    additional responsibilities and refer to the entire Committee for its consideration any

    matter relating thereto as the Committee Chair and/or the Committee Vice-Chair deem

    necessary or appropriate. MTA Audit Services’ organizational independence is derived

    from its reporting structure as it reports to the MTA Audit Committee and Executive

    Director.

    Notwithstanding these oversight responsibilities, the MTA and each of its subsidiary

    corporations and affiliates are responsible for preparing their own financial statements

    and the respective outside auditors are responsible for auditing the respective financial

    statements. The Committee, the Committee Chair, and the Committee Vice-Chair

    recognize that the Auditor General and the outside auditors have more time, knowledge

    and detailed information about the MTA and each of its subsidiary corporations and

    affiliates than do Committee members. Consequently, in carrying out its oversight

    responsibilities, no member of the Committee shall be deemed to provide (i) any expert

    or special assurance as to the financial statements of the MTA or of any subsidiary

    corporation or affiliate or (ii) any professional certification as to the work of any outside

    auditor.

    In discharging its role, the Committee is empowered to investigate any matter brought to

    its attention. To facilitate any such investigation, the Committee Chairman and/or Vice

    Chairman shall have access to all books, records, facilities and staff of the MTA

    (including any of its subsidiary corporations or affiliates). The foregoing is not intended to alter or curtail existing rights of individual board members to access books, records or staff in connection with the performance of their fiduciary duties as board members. With the prior approval of the Board Chair or a majority of the Board, the Committee may retain, compensate and/or terminate outside counsel, auditors or other experts as it deems necessary and will receive adequate funding from the MTA to engage such advisors in accordance with MTA procedures.

    III. COMMITTEE MEMBERSHIP The Committee shall consist of 3 or more members of the Board, appointed by the Board Chair. If not otherwise a member of the Committee, each Vice-Chair of the Board shall be an ex officio member of the Committee. The Board Chair shall appoint the

    Committee Chair and the Committee Vice-Chair. A member of the Committee may be removed, for cause or without cause, by the Board Chair. In the absence of the Committee Chair or the Committee Vice-Chair at a meeting of the Committee, the Board Chair shall appoint a temporary chairperson to chair such meeting. No member of the Committee shall be employed by (a) the MTA, or (b) a private entity that does, or is likely to do, business with the MTA. Insofar as practicable, at least one member of the Committee shall have financial experience.

    IV. COMMITTEE MEETINGS The Committee shall meet on a regularly-scheduled basis at least 6 times per year, and more frequently as circumstances dictate. The Committee will cause to be kept adequate minutes of all its proceedings and records of any action taken and will report on its proceedings and any action taken to the next full meeting of the Board. Committee members will be furnished with copies of the minutes of each meeting. Meetings of the Committee shall be open to the public, and the Committee shall be governed by the rules regarding public meetings set forth in the applicable provisions of the Public Authorities Law and Article 7 of the Public Officers Law that relate to public notice, public speaking and the conduct of executive session. The Committee may form and assign responsibilities to subcommittees when appropriate.

    The Committee may request that any member of the Board, the Auditor General, the Chief Compliance Officer, any officer or staff of the MTA, or any other persons whose advice and counsel are sought by the Committee, attend any meeting of the Committee to provide such pertinent information at the Committee requests.

    V. COMMITTEE REPORTS. The Committee Chair shall report on the Committee’s proceedings, and any recommendations made.

    VI. KEY RESPONSIBILITIES OF COMMITTEE CHAIR AND VICE-CHAIR

    The following responsibilities are set forth as a guide. The Committee Chair and the Committee Vice-Chair are authorized to carry out these and such other responsibilities

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    assigned by the Committee, the Board Chair or the Board, from time to time, and take

    any actions reasonably related to the mandate of this Charter.

    To assist the Committee in fulfilling its purpose, the Committee Chair and/or the

    Committee Vice-Chair shall:

     Auditors, Financial Statements & Accounting Policies:

    1. review and discuss with the Auditor General, the relevant MTA

    employees, each outside auditor, and the internal auditors any audit

    problems or difficulties encountered in the course of audit work, including

    any restrictions on the scope of activities or access to required information

    and advise the Committee as to how to resolve any disagreements

    regarding financial reporting;

    2. inquire as to each outside auditor’s view of the accounting treatment

    related to significant new transactions or other significant matters or

    events not in the ordinary course of business;

    3. review and discuss with the Auditor General, the relevant MTA

    employees, and each outside auditor any material financial or non-

    financial arrangements that do not appear on the financial statements of

    the MTA (or of any subsidiary corporation or affiliate; 4. review and discuss with the Auditor General and each outside auditor: (i)

    any accounting adjustments that were noted or proposed by the auditors

    but were “passed” (as immaterial or otherwise), (ii) any communications

    between the audit team and the audit firm’s national office respecting

    auditing or accounting issues presented by the engagement and (iii) any

    “management” or “internal control” letter issued, or proposed to be issued,

    by any outside auditor to the MTA (including to any subsidiary

    corporation or affiliate);

    5. review with the Auditor General and the outside auditor the periodic

    financial statements and footnotes of the MTA (and of each subsidiary

    corporation or affiliate, as applicable) and discussing the adequacy of the

    system of internal and the appropriateness of the accounting principles

    used, and the judgments made, in the preparation of such periodic

    financial statements;

    6. meet annually (or more frequently if necessary) with each respective

    outside auditor (without the Auditor General or any other officers or staff

    of the MTA present) to discuss the periodic financial statements of the

    MTA (and of each subsidiary corporation or affiliate, as applicable). Internal Controls & Risk Management:

    7. together with the Auditor General and the Chief Compliance Officer,

    review, discuss and (if necessary) investigate compliance with MTA

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    policies and/or refer instances of non-compliance to the MTA Inspector

    General for investigation;

    8. review and discuss with the Auditor General, the Chief Compliance

    Officer, the relevant employees of the MTA, and each outside auditor: (i)

    any significant deficiencies in the design or operation of the internal

    controls of the MTA (ii) any fraud, whether or not material, involving any

    MTA employees and (iii) related findings and recommendations of the

    outside auditors together with management’s responses;

    9. review and discuss with the Auditor General, the Chief Compliance

    Officer, the relevant MTA employees, and each outside auditor the MTA’s

    risk assessment and risk management systems, and oversee the underlying

    policies with respect to risk assessment and risk management;

    10. together with the Auditor General and the Chief Compliance Officer,

    serve as the point of contact for the MTA Inspector General, including by

    reviewing all reports and draft reports delivered to the MTA by the MTA

    Inspector General, and being available to meet with the MTA Inspector

    General as part of the Inspector General’s audits of the MTA’s books and

    records;

    11. recognizing the statutory obligations of the MTA Inspector General, and

    without denigrating from those obligations, seek to communicate with the

    MTA Inspector General with respect to any matter the Committee Chair

    and/or Vice Chair, the entire Committee, the Board Chair, the Board or the

    MTA Inspector General deem appropriate;

    Miscellaneous:

    12. submit to the entire Committee for its consideration any matters (including

    matters relating to the foregoing) that the Committee Chair and/or

    Committee Vice-Chair deem should appropriately be considered by the

    entire Committee; and

    13. report regularly to the Committee on the findings and recommendations of

    the Committee Chair and the Committee Vice-Chair relating to the

    forgoing, and on any other matters the Committee Chair and/or the

    Committee Vice-Chair deem appropriate or the Committee, the Board

    Chair or the Board request.

    VII. KEY RESPONSIBILITIES OF THE COMMITTEE

    The following responsibilities are set forth as a guide with the understanding that the

    Committee may diverge as appropriate given the circumstances. The Committee is

    authorized to carry out these and such other responsibilities assigned by the Board Chair

    or the Board, from time to time, and take any actions reasonably related to the mandate of

    this Charter.

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    To fulfill its purpose, the Committee shall:

     Auditors, Financial Reporting & Accounting Policies:

    1. in consultation with the Auditor General and the officer primarily

    responsible for the finances of the MTA and each subsidiary corporation

    and affiliate, oversee the work of the MTA’s outside auditor and provide

    guidance to the Board Chair and the Board with respect to the appointment

    (and if appropriate dismissal), evaluation, compensation of the outside

    MTA’s auditors;

    2. review and provide guidance to the Board with respect to any auditing and

    non-auditing services provided to the MTA by any of the MTA’s the

    outside auditor;

    3. review and provide guidance to the Board with respect to the annual audit

    plan and risk assessment as proposed by the Auditor General in

    consultation with the MTA Executive Director and the President of each

    subsidiary corporation and affiliate;

    4. review and discuss with the Auditor General, the relevant MTA

    employees, each outside auditor, and the internal auditors: (i) any

    significant audit findings during the year, including the status of previous

    audit recommendations; (ii) any changes required in the scope of the audit

    plan; (iii) the audit budget and staffing; and (iv) the coordination of audit

    efforts, status of the internal audit plan and the adequacy of internal audit

    resources (both numbers and capabilities);

    5. review and discuss with the Auditor General, the relevant MTA

    employees, and the outside auditor accounting policies that may be viewed

    as critical, as well as any recent or proposed significant changes in MTA

    accounting policies; and inquire as to the outside auditors’ views as to the

    application of accounting principles;

    6. monitor the consistency and comparability of the financial reporting

    processes of the MTA;

    7. monitor the integrity, consistency and comparability of the financial

    reports and other financial information provided by the MTA to any other

    governmental or regulatory body, the public or other users thereof,

    including reconciliations where necessary;

    8. review and provide guidance to the Board with respect to the appointment,

    compensation and (if necessary) dismissal of the Auditor General; 9. at least annually, review with the Auditor General a report by each outside

    auditor describing: (i) such outside auditor’s internal quality-control

    procedures; (ii) any material issues raised by the most recent internal

    quality-control review, or peer review, of the firm, or by any inquiry or

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    investigation by governmental or professional authorities, within the

    preceding five years, regarding one or more independent audits carried out

    by the firm, and any steps taken to deal with any such issues; and (iii) all

    relationships between the outside auditor and the MTA (or any subsidiary

    corporation or affiliate);

    10. on an annual basis, in each case together with the Auditor General: (i)

    review a formal written statement from each outside auditor delineating all

    relationships between such outside auditor and the MTA; (ii) actively

    engage in a dialogue with each outside auditor with respect to any

    disclosed relationships or services that may impact the objectivity and

    independence of such outside auditor and take appropriate action in

    response to such outside auditor’s report to satisfy itself of such auditor’s

    independence; (iii) consider whether, in the interest of assuring continuing

    independence of each outside auditor, the MTA’s respective outside

    auditors should be rotated; and (iv) set clear hiring policies for employees

    or former employees of the outside auditors;

    Internal Controls & Risk Management:

    11. review and discuss with the Auditor General, the Chief Compliance

    Officer, the relevant MTA employees, and each outside auditor the

    adequacy of the MTA’s internal and disclosure controls and procedures;

    12. together with the Chief Compliance Officer, review and discuss with the

    relevant MTA employees, and each outside auditor any significant risks or

    exposures and assess the steps such employees have taken to minimize

    such risks;

    13. review periodically with the Chief Compliance Officer and the General

    Counsels of the MTA and each subsidiary corporation and affiliate: (i)

    legal and regulatory matters that may have a material impact on the

    financial statements of the MTA (or any subsidiary corporation of

    affiliate); and (ii) the scope and effectiveness of compliance policies and

    programs;

    Ethics & Conflicts of Interests:

    14. together with the Chief Compliance Officer, review periodically with the

    relevant MTA employees the level of compliance with all applicable

    ethics codes, guidelines, and regulations;

    Miscellaneous:

    15. conduct an annual self-evaluation of the performance of the Committee,

    including its effectiveness and compliance with this Charter; 16. review and reassess the adequacy of this Charter annually;

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    17. consider any matter referred to the entire Committee by the Committee

    Chair and/or Vice-Chair; and

    18. report regularly to the Board on Committee findings and recommendations

    and any other matters the Committee deems appropriate, or the Board

    Chair or the Board request.

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