1. Roles and Responsibilities of the Audit Committee
Gema Ptasinski, CPA
Partner with Vicenti, Lloyd & Stutzman LLP
David Prenovost
Sr. Managing Director/Chief Financial Officer
with Cal Poly Pomona Foundation
Gregory H. Kommel
Board Member of
Cal Poly Pomona Foundation Board of Directors

2. Meet the Presenters
Greg Kommel is a fourth-year studying applied mathematics and statistics at Cal Poly Pomona. Since 2015, he has served on the Foundation Board of Directors, Foundation audit committee, Associated Students audit committee, and Foundation personnel committee. During his time at Cal Poly Pomona, he has served as the Senator to the College of Science, and has served in other student leadership roles for the Associated Students, multiple student organizations, and several University-wide committees. He plans on graduating in spring 2017 and pursuing a career in industry.
Gema Ptasinski, CPA, joined Vicenti, Lloyd & Stutzman in 1996 and was named Partner in Gema plans, directs and supervises independent financial audits of educational entities, both public and private, and other non-profits. Clients recognize Gema as being very helpful and responsive; she is there to help them resolve their most challenging audit and accounting issues. Gema has extensive experience working with Audit Committees at her retirement community clients as well as other audit clients. Gema serves as a member of the Executive Committee and is the Finance Committee Chair for a non-profit home health and hospice agency.
Mr. Prenovost is a graduate from CSU, Long Beach with a BS in Accounting and is a licensed Certified Public Accountant. Having previously worked in public accounting for international and local CPA firms and in the banking/mortgage industry, Mr. Prenovost has worked for two of the CSU auxiliaries since 1994, first at Long Beach Foundation ( ) as Director of Finance and Accounting, and currently at Cal Poly Pomona Foundation as Chief Financial Officer ( ) and now serving as the Senior Managing Director/Chief Financial Officer.

3. Overview Audit Committee Membership Key Roles and Responsibilities
The Auditor’s Report and Auditor Communications
Key Questions to Ask the Auditor
Highlighted Financial Information

4. Audit Committee Membership
At least three members
At least one should be a “financial” expert
No officer or employee can sit on the committee
Audit chair may not be a member of the finance committee
Finance committee members must make up less than 50% of the audit committee
Meet at least twice a year

5. Key Roles and Responsibilities
Audit committee charter – outlines key roles and responsibilities
Audit committee should annually perform a self-assessment
Key oversight functions:
Integrity of the financial statements
Internal control
Sets expectations regarding
integrity and ethical values,
Transparency,
and accountability
Understand how management is carrying out its internal and external reporting responsibilities and verify that timely corrective actions are taken as necessary.
Compliance
Adherence to laws and regulations
Authority to hire legal counsel

6. Key Roles and Responsibilities
Key Oversight Functions: Financial Audit, Single Audit and IRS 990:
Recommends the selection, retention or termination of the external auditor
Assessment of Independent auditor’s qualifications, independence & performance
Audit team qualifications/approval by the Chancellor’s office
Firm Peer Review – AICPA
Do they participate?
Any deficiencies and resolution?
Was the audit selected for peer review?
Firm internal quality procedures
Independence -Non-audit services performed
Performance - Timeliness, etc.
Fees

7. Key Roles and Responsibilities
Key Oversight Functions –Financial Audit, Single Audit and IRS 990:
Reviews the scope of the external auditor’s annual financial or/or single audit
Audit plan
Risk assessment and planned reliance on internal control
Status of prior year recommendations and impact to current year audit
Note: Single Audit Reports are issued per U.S. Office of Management and Budget (OMB) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)

8. Key Roles and Responsibilities
Key Oversight Functions –Financial Audit, Single Audit and IRS 990:
Reviews the results of the audit including:
Auditor opinion issued
Annual financial statements
Management letter of control deficiencies
Required communication letter (we’ll touch on later)
Monitors the implementation of any corrective action to remediate internal control deficiencies.
Review of IRS 990 (Could be performed by the Finance Committee)

9. Key Roles and Responsibilities
Key Responsibilities – Other (could overlap with Finance Committee):
Assessment of the internal audit function’s qualifications, independence & performance
Review of charter
Annual plan and risk assessment process
Evaluate Chief Internal Auditor
Ethics and compliance program
Ensure Compliance Officer (or similar) is in place & has direct access to the Board/Audit Committee
Ensure there is a system for compliance with legal and regulatory requirements
Ensure a code of conduct is in place and employees educated
Review process for reporting/whistleblower hotline

10. Audit Report and Auditor Communications
Independent Auditor’s Report
Opinion
Unmodified – no modifications concerning the financial statements
Qualified – auditor not able to satisfy all aspects of the financial status.
Adverse – states the financial statements are materially misstated or does not conform to GAAP
Disclaimer – lack of independence, scope limitation, substantial doubt about the organizations ability to survive or other uncertainties.

11. Audit Report and Auditor Communications
Significant Audit Findings
Adoption of new accounting policies and financial reporting standards
Significant estimates and disclosures
Difficulties encountered in performing the audit
Disagreements with management on financial accounting and reporting
Corrected and uncorrected misstatements (proposed adjustments)

12. Audit Report and Auditor Communications
Management representations regarding the fair presentation of the financial statements
Management’s consultations with other independent accountants
Specific issues discussed with management
Prior to engagement
During the audit
Internal control - significant deficiencies or material weaknesses

13. Audit Report and Auditor Communications –
Key Questions to Ask the Auditor
Are there any significant risks and exposure to the auxiliary regarding financial condition, controls and reporting?
What are the significant estimates in the financial statements and are there any contingent losses?
What are the most significant accounting practices?
Is the internal control adequate including IT controls and security?
What was the cause of the audit adjustments and unadjusted differences?

14. Highlighted Financial Information
What are some of the highlights your auditors address in their presentation of the financial statements?
Open Forum

15. Resources
– The AICPA Audit Committee Toolkit Not-For-Profit Entities
- peer review information
Thank you…..