Adopted Date: 09-12-1996
This policy applies to the controls, risk management and organizational governance of the University.
The Audit Committee will assist and advise the Board of Regents (Board) in fulfilling its oversight responsibilities for the University's financial reporting, internal controls, risk management, performance of external and internal auditors and compliance with laws and regulations. The Audit Committee will review all contracts for audit and non-audit services provided by independent public accountants and recommend action to the Board. These contracts must be approved by the State Auditor. Both the internal auditors and external auditors shall have direct access to the Audit Committee and the Board.
The Audit Committee of the Board of Regents shall consist of one member from each of the Regent standing committees. The Board President shall appoint members to the Audit Committee, and appoint the chair and the vice chair. The Board President shall be an alternate member, serving in the absence of a regular committee member. One member shall be designated as the "financial expert." This Regent shall possess financial expertise, including but not limited to an understanding of generally accepted accounting principles, financial statements, internal controls and audit functions.
The Audit Committee shall meet at least four times a year concerning Audit Committee issues. At least annually, the Audit Committee shall meet separately in executive session with the external auditors and shall ask for comments on management support of the audit function, quality of audit effort, quality of internal controls and other areas of concern. As needed, the Audit Committee and/or Board will meet in executive session with the Director of Internal Audit.
The University shall maintain proper financial accounts and records and prepare annual financial statements in accordance with generally accepted accounting principles. The University President and the Executive Vice President for Administration must attest that the annual financial statements accurately reflect the financial position of the University.
The University's financial accounts and records shall be audited annually by independent public accountants approved by the Commission on Higher Education (CHE) and the State Auditor. The Audit Committee will recommend to the Board the independent public accountants to conduct the annual audit. The independent public accountants who perform the annual audit are prohibited from providing consulting services to the University. The audit shall be conducted in accordance with generally accepted auditing standards.
The Audit Committee will review the audit scope and approach and oversee the audit. To the extent deemed necessary and desirable, the Audit Committee will maintain direct and separate avenues of communications with the external auditors. As soon as feasible after the end of the fiscal year, the Board of Regents will review the annual audit report, including the management letter and response, with the external auditors and will take action to approve the report. The report must also be approved by the State Auditor.
Internal Audit Department
The Internal Audit Department shall report functionally to the Board and administratively to the President of the University. Internal Audit shall be free from interference in determining the scope of internal auditing, performance of work or communication of results. The Audit Committee will review and approve the annual audit plan and budget submitted by the Director of Internal Audit. Discussions regarding hiring, performance evaluation, compensation and termination of the Director of Internal Audit require endorsement of the Audit Committee. The Committee will receive quarterly reports from the Director of Internal Audit on the status and results of the audit plan and significant audit findings. The Audit Committee will meet with the Director of Internal Audit to review the University's system of internal controls and the adequacy of accounting, financial, and operational policies and practices on financial and compliance reporting.
Audit Act, § 12-6-3, NMSA 1978; NMAC 126.96.36.199., 188.8.131.52; RPM 7.2 "Internal Auditing"