Members(as of Sept 5, 2013)
End of Term
|Mr. Stuart (Kip) Cobbett, Chair, Board of Governors, ex officio|
|Prof. Suzanne Fortier, Principal and Vice-Chancellor, ex officio|
|Mr. Michael Boychuk, Chair||[12/31/14]|
|Mr. Stephen Halperin||[12/31/15]|
|Mr. François Laurin||[12/31/14]|
|Mr. Adrien Pouliot||[12/31/15]|
|Ms. Maarika Paul||[12/31/15]|
Mr. Michael Di Grappa, Vice-Principal (Administration and Finance), Senior Steward
Terms of Reference Audit Committee
The Audit Committee (“Committee”) is established under the authority of and is accountable to the Board of Governors (the “Board”) of McGill University (the “University”), and shall function as stipulated in these terms of reference and the Regulations of the Committees of the Board of Governors of McGill University (the “Regulations”). In accordance with the Regulations, meetings of Board Committees shall be held in closed session unless the Committee resolves to carry out a meeting or part of a meeting in open session.
a. Appointments to the Committee are approved by the Board, normally on the recommendation of the Nominating, Governance and Ethics Committee.
i. The Committee shall consist of three to five members, exclusive of ex officio members, selected from among the following:
- Members of the general public (at least one);
- At-large members of the Board;
- Alumni Association members of the Board;
- Governors Emeriti.
ii. Members shall be appointed on the basis of their independence from the University. Committee members must be financially literate. Expertise and experience in accounting, law, or business administration will be relevant criteria for appointment to this Committee. Ideally one member of the Committee shall be a member of one of the professional orders of accountants governed by the Professional Code (chapter C-26).
iii. University students, employees, and individuals holding a personal services contract with the University, except for the Principal, are not eligible for appointment to this Committee.
c. The Chair of the Board and the Principal shall serve as ex officio members of the Committee.
d. The Chair of the Committee shall be appointed by the Board, normally on the recommendation of the Nominating, Governance and Ethics Committee.
e. The Vice-Principal (Administration and Finance) shall serve as the Senior Steward to the Committee.
f. The Secretary-General or her/his delegate shall serve as Secretary and governance advisor to the Committee.
g. Where necessary or appropriate to facilitate and support the business of the Committee, the Senior Steward may invite University staff to serve as resource persons for particular items of business before the Committee at a meeting.
2. Mandate of the Committee
The Committee assists the Board in fulfilling its governance responsibilities with respect to:
a. annual external audit;
b.quarterly and annual financial statements;
c. other external audit activities and services as may be undertaken from time to time;
d. financial systems and controls;
e. internal audit function; and
f. risk management systems and mechanisms.
The Committee may consider other matters referred to it by the Board, the external or internal auditors, the Principal, the Provost or any vice-principal.
Without limiting the generality of the foregoing, the Committee shall:
2.1 Annual External Audit
2.1.1 Functions delegated by the Board of Governors
a. review the scope of the annual audit of the University’s financial statements and the proposed audit procedures to be performed by the external auditor which, unless otherwise mandated, shall be in accordance with Generally Accepted Accounting Principles (“GAAP”), and approve the annual audit plan;
b. approve the fees for the external audit of the University’s financial statements;
c. review the results of the annual audit and any material observations or other matters from the external auditors requiring communication to the Committee;
d. at the meeting where the annual audit is considered:
i. hold a private meeting with the external auditors without the presence of members of the administration, to discuss, among other items, the external auditors’ evaluation of the University’s financial and accounting systems and personnel and the cooperation that the external auditors received during the course of their audit;
ii. hold a private meeting with members of the administration without the presence of the external auditors, to discuss, among other items, the administration’s experience in working with the external auditors, and any other matter raised by the Committee;
iii. ensure that there is a good working relationship between the University and the external auditors and that there are no unresolved issues between them;
e. assess the effectiveness of the work performed by the external auditors, obtain assurances that the external auditors have complied with their obligations and report thereon at least annually to the Board;
f. discuss with the external auditors their independence from management and the University (including identification of all relationships between the external auditors and the University), consider whether the provision of any non-audit services by the external auditors is compatible with the external auditors’ independence and, if determined by the Committee, recommend that the Board take action to ensure the independence of the external auditors;
2.1.2 Functions subject to the authority of the Board of Governors
a.recommend to the Board the appointment of external auditors to conduct the annual audit of financial statements;
2.2 Quarterly and Annual Financial Statements
2.2.1 Functions delegated by the Board of Governors
a. review the quarterly financial statements after the second and third quarters;
b. review the audited annual financial statements together with any associated reports, letter, schedule of unadjusted audit differences provided by the external auditors or senior administration;
2.2.2 Functions subject to the authority of the Board of Governors
a.recommend to the Board the approval of the annual audited financial statements, the auditor’s report and such other matters as the Committee may consider appropriate;
2.3 Other External Audit Activities and Services (functions delegated by the Board of Governors)
a. where it deems necessary and after consultation with senior administration, approve the engagement of:
i. an external audit firm to perform specialized services other than the auditing of financial statements;
ii. specialized independent advisors;
2.4 Financial Systems and Controls
2.4.1 Functions delegated by the Board of Governors
a. initiate and receive regular and special reports on financial systems and controls;
b. review with the Vice-Principal (Administration and Finance) the financial systems and controls relating to the safeguarding of the University’s assets and operations to ensure that they are appropriate and effective;
c. make recommendations to the senior administration on operational matters related to financial systems and control;
d. monitor the framework and specific policies and procedures for review of expenses and perquisites of the University’s senior administrative officers;
e. receive reports at least annually regarding all contracts, agreements and settlements where the value of such contract, agreement or settlement is greater than $4,000,000 and where the contract, agreement or settlement has not previously been reviewed and approved by the Committee or by the Board as defined by the Regulations relating to the Approval of Contracts and Signing Authority*.
*This will include, but not be limited to, purchasing contracts, technology contracts, loan contracts, research grants, research agreements, service agreements, commercialization contracts, academic contracts, contracts relating to the hiring of consultants, advertising and publicity contracts, naming agreements and settlements and transaction agreements.
2.4.2 Functions subject to the authority of the Board of Governors
a. make recommendations to the Board on policy related to financial systems and controls;
2.5 Internal Audit Function (functions delegated by the Board of Governors)
a. review and approve the annual internal audit objectives, plans and priorities;
b. receive internal audit reports and consider recommendations as appropriate;
c. review and monitor compliance with the recommendations set out in the reports of the internal auditor; recommend further action, if appropriate, to address concerns identified by the internal auditor;
d. review the overall effectiveness of internal audit functions, including the quality of the working relationships between the internal auditors and the University;
e. review any activity likely to be detrimental to the institution’s financial health that is brought to the Committee’s attention by the internal auditor or another person.
f. submit to the Board an annual report summarizing internal audit functions and activities.
2.6 Risk Management
2.6.1 Functions delegated by the Board of Governors
a. receive regular and special reports on risk management, including the enterprise risk management program;
b. review the insurance coverage of the University to ensure that all risks are addressed adequately and appropriately;
c. annually review with the University’s General Counsel or outside counsel, litigation or other legal matters that may have a material impact on the finances or well-being of the University;
d. review any activity likely to be detrimental to the institution’s financial health that is brought to its attention by the senior administration or another person;
2.6.2 Functions subject to the authority of the Board of Governors
a. ensure that a risk management process and strategy for the institution’s operations is in place and monitor its implementation;
b. have oversight of the University’s enterprise risk management program and related policies and framework, including the ISO31000 enterprise risk management framework;
c. review and make recommendations to the Board of Governors with respect to matters that, in the opinion of the Committee, may pose material risk to the University;
d. consider and make recommendations to the Board, as appropriate, on any matters identified by the Committee, the Board, the external or internal auditors, the Principal, the Provost or a Vice-Principal that may pose a significant risk to the University;
3. General provisions
a. The Committee shall meet at least three times during the year. The Committee shall have a calendar of business, maintained by the Secretary-General or her/his delegate, for the purpose of ensuring that each meeting agenda addresses responsibilities as outlined in these terms of reference.
b. The Committee shall report to the Board on a regular basis, and within a reasonable time following a Committee meeting.
c. The Committee shall review its terms of reference at least once every three years and recommend any changes to the Board’s Nominating, Governance and Ethics Committee.
Final - Approved by the Executive Committee on September 24, 2007
Revised – Approved by the Executive Committee on March 17, 2008
Revised – Approved by the Executive Committee on January 25, 2010
Revised – Approved by the Board of Governors on November 29, 2011