Audit Committee Charter
Authority
The University of Texas (UT) System Policy UTS129, Internal Audit Activities authorizes the establishment of an Institutional Audit Committee (Committee). Exhibit A of UTS Policy 129 notes, “Each institution will organize and maintain an institutional audit committee.”
Purpose
The University of Texas of the Permian Basin (UTPB) Audit Committee is an essential part of the risk management and internal control infrastructure of UTPB and The University of Texas System. Its primary responsibilities are to assist and advise the UT System Audit, Compliance, and Management Review Committee (ACMRC) and the UTPB President in the following matters:
- Oversight of management activities and processes put in place to manage business and financial risk to the institution's mission(s) and objectives.
- Oversight and direction of the internal audit function to ensure alignment of activities with areas of high risk and/or high potential for adding organizational value.
- Oversight of any external public accounting firms and review of their results.
- Evaluation of risks identified by management or through audit, advising management and elevating reporting of risk management and audit activities to the UT System (through internal audit or direct processes), including the ACMRC.
Roles
Membership in the Audit Committee is made up of members who are external to UTPB in addition to key members of the UTPB management team.
The Chair of the Committee will be nominated by the President and approved by the Chair of the ACMRC. The Committee is functionally responsible to the ACMRC and assists the ACMRC in discharging its oversight duties for the UT System. This is accomplished as the Committee carries-out its responsibilities, as defined in this charter. The Committee Chair has direct access to the ACMRC Chair; however, most of the reporting and coordination of information is administratively facilitated through the Chief Audit Executive of the UT System.
At least three Audit Committee members must be external to UTPB and the Chair must be one of the external members. The external members will serve three-year terms with the eligibility to be appointed to one additional three-year term. Members of management may be Audit Committee members or invited guests and should include the President.
Generally, the external Audit Committee members must be independent and objective, have management or governance leadership experience, and possess skills which will complement the profile of skill to be held by an Audit Committee. Such skills include but are not limited to financial and technology acumen, academic and healthcare industry awareness, and basic risk and control understanding. Internal Audit and Management can aid members in seeking material and education to maintain current and adequate member skill. Members of the Audit Committee should receive orientation which is provided by the UTPB Internal Audit.
Meetings
The Audit Committee meets quarterly, with the authority to convene additional meetings as necessary. The meetings should provide for direct communication between the Chief Audit Executive, Committee members, and the President. Evidence of actions taken by the Audit Committee should be reflected in recorded minutes. A majority of members constitutes a quorum and attendance should be recorded in the minutes.
Responsibilities
The Audit Committee’s specific responsibilities in carrying out its oversight and reporting roles are delineated below.
General Responsibilities
| Responsibility | Timing |
|---|---|
| Meet at least four times per year | Quarters 1–4 |
| Prepare meeting agenda | Quarters 1–4 |
| Maintain approved meeting minutes | Quarters 1–4 |
| Review Audit Committee Charter | Quarter 2 |
| Perform additional assigned functions | As needed |
| Hold executive sessions as needed | As needed |
Oversight of Business, Technology, and Financial Risk Management
| Responsibility | Timing |
|---|---|
| Ensure management identifies and manages business risks | Ongoing |
| Review financial integrity reports and audits | Ongoing |
Oversight of Internal Audit Activity
| Responsibility | Timing |
|---|---|
| Approve Internal Audit Charter | Quarter 1 |
| Review Audit Charter | Periodically |
| Review risk assessment methodology | Quarter 4 |
| Review and approve Annual Audit Plan | Quarter 4 |
| Review audit plan progress | Quarters 1–4 |
| Receive audit engagement results | Quarters 1–4 |
| Review hotline/confidential reporting | As needed |
| Monitor management action plans | Quarters 1–4 |
| Approve use of audit resources outside plan | As needed |
| Review audit staffing and organization | Quarter 4 |
| Review internal audit self-assessment | Quarter 1 |
| Review external quality assessment | Every 3 years |
| Provide input on Chief Audit Executive evaluation | As needed |
| Provide input on hiring/dismissal of CAE | As needed |
Oversight of External Firms
| Responsibility | Timing |
|---|---|
| Review external audit contracts | As needed |
| Review external audit reports | As needed |
| Receive reports from external audit organizations | As needed |
UT System Coordination
| Responsibility | Timing |
|---|---|
| Maintain communication with UT System Audit Office | Ongoing |
| Attend UT System meetings/orientation | As needed |
| Provide audit and reporting updates to UT System | Ongoing |
The responsibilities outlined above will be updated periodically by the Audit Committee to reflect changes in UT System guidance, regulatory requirements, authoritative guidance or best practices in business, technology and financial risk management.