Committee Approved: November 2010

The Audit Budget Committee is a subcommittee of the Board of Directors of UWF Foundation, Inc. (the "Foundation"). The primary function of this committee is to assist the board in fulfilling its financial oversight responsibilities. The committee will perform such other functions as assigned by law, the Foundation's bylaws, or the Board of Directors.

The Audit Budget Committee shall have the power to conduct or authorize investigations into any matters within the committee's scope of responsibilities, which include the reviewing of the financial information of the organization, the internal control structure, the budget process, and the audit process. The committee shall meet a minimum of two times a year or more frequently as circumstances require. The committee may ask members of Foundation staff, University management, or others to attend meetings and provide pertinent information as necessary.

The membership of the Audit Budget Committee shall consist of at least six, but no more than seven, independent members of the Board of Directors and will include at least one financial expert. A financial expert is someone with knowledge of Generally Accepted Accounting Principles (GAAP), experience with financial statement preparation for an organization of similar size and complexity, and, if possible, experience serving on a working audit committee for a non profit entity. Audit Budget Committee members shall be designated by the president of the Board of Directors of the Foundation. The Board Treasurer will serve as the Committee Chair. Attendance by three or more committee members at any properly noticed meeting will constitute a quorum.

The Audit Budget Committee is responsible for:

• Relationship with the internal and external auditor (appointment, compensation, retention, plan review, fieldwork, reports, management letter)
• Asking auditor's evaluation of management
• Oversight of financial management
• Oversight of the institution's internal control structure
• Review financial statements for completeness and reasonableness
• Oversight of tax filings (review and recommend for approval to the Board)
• Monitoring related party transactions
• Reviewing and approving policies, including conflict of interest
• Monitoring legal matters that may affect financial health
• Adequacy of insurance coverage
• Recommending improvements
• Initiating and overseeing any special investigations
• Preparation of an annual Foundation budget (for review and approval by the Board)

In meeting its duties and responsibilities, the Audit Budget Committee is expected to:

1. Independent Auditor: The Audit Budget Committee has the following responsibilities in relation to the Foundation's Independent Auditor.

1. Meet at least twice a year with the independent auditor (generally at the beginning of the audit and at the end to receive the audited financial statements).
2. Review and update the committee's charter periodically. Any revisions to the charter must be approved by a majority vote of both the Audit Budget Committee and the Board of Directors.
3. Assess the qualifications and effectiveness of the independent auditor and approve the fees charged for the audit and other accounting services performed. Make recommendations to the Board of Directors for the nomination or discharge of the Foundation's independent auditors.
4. Confirm and assure the independence of the independent auditor. If the audit firm is retained beyond five consecutive years, the independent auditor in charge must be rotated.
5. Review the plan and scope of the financial audit performed by the independent auditors, which should include a summary of the work to be performed by staff, to assure completeness of coverage, reduction of redundant efforts, and the effective use of audit resources.
6. Provide an open avenue of communication between the Foundation's auditor, staff, and the Board of Directors. Ensure open communication with the Foundation's auditors and use information received to assist in assessing the strength of the Foundation's internal control and the potential for fraudulent financial reporting.
7. At least annually, ask management and the independent auditors about significant risks or exposures; and assess the steps management has taken to minimize such risks.
8. Consider and review with the independent auditor:

1. The adequacy of the company's internal controls including computerized information system controls and security.
2. Any related significant findings and recommendations of the independent auditor or the internal auditor and review management's responses.
3. Consider auditors views on management's involvement in the financial reporting process

2. Foundation Executive Director, the University President (or his/her designee), and the independent auditors- Review the following items with the Foundation Executive Director, the University President (or his/her designee), and the independent auditors at the completion of the annual examination:

1. The company's annual financial statements and related footnotes.
2. The independent auditor's audit of the financial statements and the report issued.
3. Any significant changes required in the independent auditor's audit plan.
4. Any serious difficulties or disputes encountered with management during the course of the audit.
5. Any significant findings during the audit and management's response and/or plan of corrective action.
6. Other matters related to the conduct of the audit, which are to be communicated to the committee under Generally Accepted Auditing Standards.

3. Annual Review of Internal Controls: To ensure control effectiveness, the Audit Budget Committee should annually review with management the effectiveness of the institution's internal control structure. The committee should:

1. Confirm there is a clearly defined and documented internal control process.
2. Consider whether controls reinforce specific accountabilities, are reasonable, provide for detection and deterrence, and are practical and sustainable.
3. Include inquiry into Human Resources mechanisms (i.e., hiring, background checks, performance evaluations, etc.).
4. Ask management to look for ways to streamline and simplify processes and controls, while advocating for sustainable processes.
5. Confirm and evaluate measures that ensure all policies and training practices are well-communicated and followed.
6. Provide a mechanism for employees to report concerns and suspected fraud (Whistleblower Policy).

4. Officers and Key Employees: At least annually, the committee should review with management the policies and procedures with respect to officers, key employees (executive director, VP for Advancement, University President), disqualified persons as defined by the IRS (under Internal Revenue Code Section 4958), expense accounts, and perks, including excess benefit transactions; consider the results of any review of these areas by the internal auditor or the independent auditors; and consider the potential for Foundation or University management to override controls or otherwise inappropriately influence the financial reporting process.

Actions of the committee shall be reported to the Board of Directors with such recommendations as the committee may deem appropriate.

5. Budget Responsibilities:

1. The Audit Budget Committee should review the Foundation budgets for revenue streams established by Board Policy (i.e., the Investment Policy) including the Annual Foundation Operating Budget and the budget for the use of Non-endowed Funds revenue.
2. Staff and University management should be required to provide sufficiently detailed information as to how the funds will be expended.
3. Annually, prior to the start of the fiscal year, review Housing's proposed budget.
4. The committee should consider the planned expenditures for overall reasonableness and to ensure they are in keeping with the overall mission of the University.
5. Review and present at each quarterly meeting of the Board of Directors the Budget to Actual Reports for the Foundation and Housing.