The mandate of the Finance & Audit Committee (the "Committee") is to assist the Council in fulfilling its oversight responsibilities by:
- Gaining reasonable assurance regarding the integrity of the College’s financial reporting and financial management, including audits and controls.
- Reviewing the financial information which will be provided to stakeholders, the systems of corporate controls which management and the Council have established, and the audit process.
- Having principal oversight responsibility with respect to certain of the College’s material financial matters, including investments.
- Assessing the College’s financial performance against the agreed capital and operating budgets.
The Committee affords management, the external auditor and regulators a direct conduit to the Council, without allocating to the Committee the ultimate decision-making powers of the Council, except as may be provided for herein, or the responsibilities which have already been appropriately delegated to management.
The Finance & Audit Committee is a standing committee of the Council.
The Committee consists of:
- Six members of Council, striving for an equal membership of registered nurse members and public members.
- Committee members may be removed by the Council.
- The Council shall designate a Committee Chair.
- All members shall be financially literate. Financially literate means having the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be highlighted by the College’s financial statements.
- Ideally, at least one member shall be a financial expert. This means they will have an accounting designation and have the ability to prepare a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the College’s financial statements.
- Non-members: The Council Chair, CEO & Registrar, COO, and external auditor have the right to receive notice of, attend and have voice at all Committee meetings.
- The College’s auditors shall be advised of the names of the Committee members and will receive notice of and be invited as necessary to attend meetings of the Committee, and to be heard at those meetings on matters relating to the Auditor's duties.
- The Finance & Audit Committee acts in an advisory capacity to management and the Council on financial matters, including investments, as may from time to time be referred to it by the Council or management.
Terms of Office
- The Chair of the Finance and Audit Committee is appointed for two years or until the end of the Councillor’s term, whichever is shorter.
- Committee members are appointed for three years or until the end of the Councillor’s term, whichever is shorter.
- The Chair and Committee members may serve for up to two consecutive terms.
- A quorum will consist of majority of members of the committee.
The Committee has the authority to:
- Make recommendations to the Council with regard to financial and audit issues.
- Authorize investigations or studies of matters that reflect on the financial integrity of the College or such other matters as deemed appropriate by the Council. This includes the authority to investigate and/or study items raised through the Safe Disclosure (Whistleblower) Protocol.
- Obtain expertise and assistance from outside legal, governance, financial or other advisors as required to assist in the execution of committee responsibilities. Use of these services, along with associated costs and contractual obligations shall be reported to the Council periodically.
Duties and Responsibilities
Responsibilities related to Financial Reporting: The Committee will:
- Gain reasonable assurance regarding the integrity of the College’s financial statements and financial reporting process and the College’s systems of internal accounting and financial controls;
- Gain reasonable assurance that the College complies with all applicable laws, regulations, rules, policies and other requirements of governments, and regulatory agencies relating to financial reporting and disclosure.
- Gain reasonable assurance that the accounting principles, significant judgments and disclosures which underlie or are incorporated into the College’s financial statements are the most appropriate in the prevailing circumstances.
- Review the College’s annual financial statements with management and the external auditors to gain reasonable assurance that the statements are accurate, complete, represent fairly the College’s financial position and performance and are in accordance with Accounting Standards for Not-for-Profit Organizations (or applicable approved accounting standards) and together with management’s discussion and analysis constitute a fair presentation of the College’s financial condition and report thereon to the Council before such financial statements are approved by the Council.
- Review the College's internal quarterly financial statements with management in relation to the College's financial forecast.
- Receive from the external auditors, reports on their review of the annual financial statements;
- Review the College’s audited financial statements prior to their approval by the Council;
- Receive from management and review a copy of the representation letter provided to the external auditors and receive from management any additional representations required by the Committee;
- Review major issues regarding accounting principles and financial statement presentation including any significant changes in the selection or application of accounting principles to be observed in the preparation of the College’s accounts;
- Review with management and the external auditors the degree of conservatism of the College’s underlying accounting policies, key estimates and judgments and reserves.
Responsibilities related to Controls: The Committee will:
- Gain reasonable assurance as to the effectiveness of internal controls as these relate to financial reporting and integrity.
- Review the plans of the external auditors to gain reasonable assurance that the combined evaluation and testing of internal and disclosure controls is comprehensive, coordinated and cost-effective.
- Receive regular reports from management, the external auditors and its legal department on all significant control deviations or indications/detection of fraud and the corrective activity undertaken in respect thereto.
Responsibilities related to Relationship with External Auditors: The Committee will:
- Recommend to the Council the nomination of the external auditors;
- Approve the remuneration and the terms of engagement of the external auditors;
- Review the performance of the external auditors annually or more frequently as required;
- Receive a report annually from the external auditors with respect to their independence, such report to include a disclosure of all engagements (and fees related thereto) for non-audit services by the College;
- Review with the external auditor and approve its annual audit plan for the College, and, thereafter, the results of the external audits of the College, any significant problems encountered in performing the audit, and the contents of any management letters issued by the external auditor to the College, and management's response thereto;
- Review with the external auditor the contents of their annual audit reports, and with the regulator the contents of regulatory examination reports and review any significant recommendations from the external auditor or the regulator to strengthen the internal controls of the College;
- Review any unresolved significant issues between management and the external auditor or the regulator that could affect the financial reporting or internal controls of the College;
- Discuss with management and the external auditors the timing and the process for implementing the rotation of the lead audit partner, the peer review (concurring or reviewing) partner and any other active audit engagement team partner;
- Review with the external auditors the scope of the audit, the areas of special emphasis to be addressed in the audit, and the materiality levels which the external auditors propose to employ;
- Meet briefly, as required with the external auditors in the absence of management to determine that no management restrictions have been placed on the scope and extent of the audit examinations by the external auditors or the reporting of their findings to the Committee;
Responsibilities related to Risk Oversight: The Committee will:
- Acknowledge that it is the responsibility of the Council, in consultation with management, to identify the principal risks facing the College, determine the College’s tolerance for risk and approve risk management policies, the committee shall focus on financial risk and gain reasonable assurance that financial risk is being effectively managed or controlled by:
- Reviewing with management the College’s tolerance for financial risk;
- Reviewing with management its assessment of the significant financial risks facing the corporation;
- Reviewing with management the College’s policies and any proposed changes thereto for managing those significant financial risks;
- Reviewing with management its plans, processes and programs to manage and control such risks.
- Review policies and compliance that require significant actual or potential liabilities, contingent or otherwise, to be reported to the Council in a timely fashion;
- Review regularly with management, the external auditors and the College’s legal counsel, any legal claim or other contingency, that could have a material effect upon the financial position or operating results of the College and the manner in which these matters have been disclosed in the financial statements.
Responsibilities related to Compliance with Laws and Regulations: The Committee will:
- Review regular reports from management and others with respect to the College’s compliance with laws and regulations and gain reasonable assurance that the College’s policies, procedures and programs in relation thereto are operating effectively and that the College’s provisions with respect to such matters are sufficient and appropriate;
- Monitor compliance with the College’s Code of Conduct with respect to the following issues:
- conflicts of interest, including transactions and agreements in which a Councillor has a material interest;
- protection and proper use and exploitation of the College’s assets and opportunities;
- fair and ethical dealing with the College’s suppliers and employees;
- compliance with applicable laws, rules and regulations; and
- reporting of any illegal or unethical behavior or other breaches of the Code of Conduct.
- Discuss with the Counsel any significant legal, compliance or regulatory matters that may have a material effect on the financial statements or the business and affairs of the College.
Responsibilities related to Other Duties: The Committee will:
- Periodically review the form, content and level of detail of financial reports to the Council;
- Review annually the expenses of the Chair and the Chief Executive Officer/Registrar to gain reasonable assurance as to the reasonableness of such expenses;
- After consultation with the Chief Operating Office and the external auditors, gain reasonable assurance, at least annually, of the quality and sufficiency of the College’s accounting and financial personnel and other resources;
- Review in advance the appointment of the College’s senior financial executives;
- Investigate any matters that, in the Committee’s discretion, fall within the Committee’s duties;
- Review and approve the College’s policies with respect to the hiring of partners, employees and former partners and employees of the current and former external auditors;
- Establish procedures for (see Safe Disclosure Protocol):
- the confidential receipt, retention and treatment of complaints received by the College regarding the College’s accounting, internal accounting controls or auditing matters; and
- the confidential anonymous submission, retention and treatment of concerns by employees regarding questionable accounting or auditing matters; and require that all such matters be reported to the Committee together with a description of the resolution of the complaints or concerns.
Governance Process and Meetings
Responsibilities related to Governance Process: The Committee will:
- Establish in consultation with management a schedule of meetings each year in order to discharge its responsibilities.
- Meet regularly, not less than four times per year, and at such other times as may be requested by the Chair. The external auditor or any member of the Committee may call a meeting of the Committee;
- Have the Chair of the Committee establish the agenda and the annual timetable which shall then be circulated among the Committee members. Ordinarily the Chair will set the agenda in consultation with the Chief Operating Officer;
- Send an agenda, together with materials relating to the subject matter of each meeting.
- Communicate its expectations to management and the external auditors with respect to the nature, timing and extent of its information needs. The Committee expects that written materials will be received from management and external auditors at least one week in advance of meeting dates.
- Meet in person, by video conference, and/or by teleconference.
- Prepare minutes for all meetings to document the Committee’s discharge of its responsibilities.
- Circulate in draft form, the minutes to all Committee members to ensure an accurate final record which will be approved at a subsequent meeting of the Committee and will distribute these minutes to the full Council.
- Review and update this Charter on a regular basis for approval by the Council.
- Gain reasonable assurance the Committee receives education and training as necessary to enable it to fulfill its mandate effectively.
- Evaluate its own performance periodically and develop criteria for such evaluation.