Audit Committee

Fiscal Year: 2012

Chair: Keith M. Stolzenburg

Members:

• Sheldon M. Berlow
• William M.E. Clarkson
• Richard E. Heath
• Arthur A. Russ, Jr.
• William I. Schapiro

Special Members: Anthony B. Martino, Daniel J. Zimmer

Meeting Schedule: May and September, and as determined by committee chair

Staff Support: Elaine C. Schaffer, Edward P. Schneider

Purposes

The audit committee is appointed by the board of trustees to assist the board in fulfilling its responsibilities. The audit committee's duties and responsibilities are to:

• Monitor the integrity of the Foundation's financial reporting process and systems of internal controls regarding finance, accounting, tax and legal compliance.
• Monitor the independence and performance of the independent auditors.
• Provide an avenue of communication between the independent auditors, management, and the trustees.
• Monitor compliance with whistle-blower policy.
• Monitor compliance with conflict of interest policy.
• Be alert for any aspect of the operations of the Foundation or use of its money that should be brought to the attention of the Chair and/or the President.
• Direct and oversee management's implementation of an effective process to identify, monitor, and manage the potential risks that the operation faces as it relates to financial reporting, internal controls, people, processes, systems and external events.
• Consider any matters which from time to time may be referred to the audit committee by the board of trustees or Executive Advisory Committee of the Foundation.

The audit committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the independent auditors and to any employee of the Foundation. The audit committee has the right to retain special legal, accounting, or other consultants as it deems necessary in the performance of its duties and to the extent permitted by law it may, in its discretion, treat as confidential information received in the course of any investigation. The Foundation shall pay the reasonable fees and expenses of such consultants retained by the audit committee.

Structure

The audit committee shall be comprised of five or more members of the Board ("member of the board" is defined as: a trustee, a trustee emeritus, or a director). All members shall have a basic understanding of finance and accounting and be able to read and understand financial statements, and at least one member of the committee shall have accounting or related financial management expertise. Also, a majority of members shall be independent of the University and/or the UB Foundation. For the purpose of this prior sentence, membership on the Foundation's board of trustees shall not be cause for a committee member to be non-independent.

Audit committee members shall be appointed by the board of trustees on the recommendations of the nominating committee.

The audit committee shall meet at least two times annually, or more frequently as circumstances dictate. The committee chair shall prepare and/or approve an agenda in advance of each meeting. The committee should meet in executive session at least annually and, with the independent auditors at least annually to discuss any matters that the committee believes should be discussed.

Responsibilities

Review Procedures

1. Audit Plan

Review the independent auditors' audit plan prior to commencement of the audit. Discuss scope, staffing, locations, and reliance upon management.

2. Annual Audit

Review the Foundation's proposed annual audited financial statements prior to distribution. This review should include the matters required to be discussed under Statement of Auditing Standards No. 61, Communications with Audit Committees, which includes discussions with management and independent auditors of significant issues regarding accounting principles, practices and judgments, including without limitation donors' restrictions, changes in accounting policies or practices and in financial reporting practices and controls, and disagreements between the auditors and management over any accounting or reporting issue and best practices in accounting by comparable organizations.

3. Auditor's Findings

In consultation with the management and the independent auditors, consider the integrity of the financial reporting processes and controls. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures. Review significant findings prepared by the independent auditors together with management's responses.

4. Legal Compliance of Audit

On at least an annual basis, review with the Foundation's legal counsel any legal matters that could have a significant impact on the organization's financial statements. To the extent that the audit committee has any question as to whether any part of the financial statements are in compliance with applicable laws and regulations, the committee shall consult legal counsel.

5. Expense Reimbursement Policies

Review the Expense Reimbursement Policies at appropriate intervals. Also, periodically, review payments made to the university officers who are beneficiaries of these policies.

6. Purposes, Structure & Responsibilities

Review and reassess the adequacy of this document at least annually. Submit suggested changes to the executive committee for approval.

Independent Auditors

7. Evaluation of Auditor

The independent auditors are accountable to the audit committee and the board of trustees. The audit committee shall review the independence and performance of the auditors and annually recommend to the Board the appointment of the independent auditors or approve any discharge of auditors when circumstances warrant.

8. Fees

Approve the fees and other significant compensation to be paid to the independent auditors.

9. Independence of Auditor

On an annual basis, the committee should review and discuss with the independent auditors all significant relationships they have with the Foundation that could impair the auditors' independence. The committee should require a written representation from the auditors as to whether the auditors are independent and the committee should determine whether it believes the auditors to be independent. In making such determination, the committee may, but need not, rely on the auditor's representation.

10. Foundation's Accounting Principles

Consider the independent auditors' judgments about the quality and appropriateness of the Foundation's accounting principles as applied in its financial reporting.

Approved by Board of Trustees on June 27, 2007.