Regents Policy 1401: Policy on Appointment of Expert Advisors to the Committee on Compliance and Audit
Approved March 20, 2008
The Regents' Committee on Compliance and Audit will appoint expert advisors to serve as subject matter experts in finance and compliance to assist the Committee in performance of its responsibilities. The advisors will meet requirements of relevant education, experience and credentials, will meet the University’s standards for independence, and will be reviewed for actual or potential conflicts of interest. Reference and background checks will be completed prior to appointment. The term of appointment will be 1-3 years. Terms may be renewed if the screening committee and the Chair of the Committee on Compliance and Audit determine that the individual should be reappointed for an additional term. This policy describes the criteria and process for selection.I. The Selection Process
- Applications and nominations will be sent to the Office of the Secretary and Chief of Staff or the Office of the Senior Vice President–Chief Compliance and Audit Officer.
- Candidates will be contacted at the appropriate time to confirm their willingness to serve for a one to three year term. If they are willing to serve, independence and confidentiality requirements and a background check will be conducted. They will also be informed of Regents policies concerning defense and indemnification.
- The Secretary and Chief of Staff or designee will convene a screening committee to review candidates. Members of the screening committee will be the Chair of the Committee on Compliance and Audit, the Senior Vice President–Chief Compliance and Audit Officer of The Regents, the Secretary and Chief of Staff to The Regents, the Vice President and General Counsel of The Regents, the Vice President–Financial Management and the current Financial and Compliance Advisors. With the exception of the Advisors, all members may delegate their role to a designee. Members will solicit comments from others as appropriate. The Chair of the Committee on Compliance and Audit may designate additional members of the screening committee.
- Persons eligible for appointment
as expert advisors to the Committee on Compliance and Audit must be
independent and there must be no conflicts of interest.
Criteria for exclusion include:
- Employment of the individual or immediate family by the University of California or the U.S. Department of Energy.
- Employment of the individual or immediate family by the current external auditor.
- The individual or immediate family member has been a contractor or consultant to the University or participated in their organization’s decisions related to consulting with the University, receiving more than $60,000 (total) within the past three calendar years.
- The screening committee will assess the following:
- Professional credentials and relevant experience.
- Potential conflicts for the candidate or the candidate’s immediate family members.
- Affiliations or connections with the University and its related entities.
- References and background checks done through selected public sources
- Prior to making the final selection, information about the finalist(s) for the appointment(s) will be forwarded to the Chairman of the Board and the Chair of the Committee on Finance to solicit their views. The Chair of the Committee on Compliance and Audit will make the final decision on the candidate to advance to the Committee on Compliance and Audit for appointment.
II. Financial Advisor Selection Criteria
- Financial Advisor shall have the following attributes:
- An understanding of generally accepted accounting principles and financial statements. For the University, knowledge of accounting principles as promulgated by the Governmental Accounting Standards Board (GASB) applicable to higher education is preferred.
- Experience in:
- Preparation or auditing of financial statements of generally comparable institutions and
- Familiarity with application of such principles in connection with the accounting for estimates, accruals and reserves, including third-party reserves of Medical Centers as well as self-insurance reserves
- The design and evaluation of internal controls
- Understanding of Compliance and Audit Committee functions including oversight of ethics and compliance matters
- The foregoing attributes must have been acquired through
any one or more of the following:
- Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions;
- Experience actively supervising any of the above-listed positions or person performing similar functions
- Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements, or
- Other relevant education and experience
III. Description of the Role of the Financial Advisor
- The Financial Advisor to the Committee on Compliance and Audit
is to provide advice and consultation to the Committee
in the following areas:
- Financial and accounting matters, including assistance in reviewing UC financial statements and in asking appropriate questions regarding those statements; the University’s choices of accounting principles, any changes in accounting principles and estimates having a significant impact on the financial statements;
- Compliance with GASB pronouncements and changes in auditing standards;
- Independent views of management’s compliance with accounting standards;
- The University’s internal control structure and processes, material changes in controls, the control implications of contemporary internal or external issues, and the significance of control findings reported to the Committee;
- A view of the public accountant’s expertise and overall performance;
- General assistance with audit committee oversight of the University’s accounting, auditing, ethics and compliance practices.
IV. Compliance Advisor Selection Criteria
- A Compliance Advisor shall have the following attributes:
- An understanding of corporate ethics and compliance programs, including development and implementation programs as well as systems for monitoring. Experience in a university setting would be helpful.
- Experience in:
a. Prevention, detection and response to compliance risks; education, auditing and monitoring concepts;
b. Understanding implications for compliance and culture in a changing regulatory environment;
c. Design and evaluation of internal controls and reducing compliance risks through risk mitigating activities.
- Understanding the Compliance and Audit Committee functions, including oversight of ethics, risk and compliance, as well as risk mitigation matters.
- The foregoing attributes must have been acquired through any one or more of the following:
- Education and experience as an Ethics and Compliance Officer or experience in one or more positions that involve the performance of similar functions;
- Experience actively supervising such a position or person performing similar functions;
- Experience overseeing or assessing the performance of companies with respect to their compliance, ethics or risk function, or
- Other relevant education and experience.
V. Description of the Role of the Compliance Advisor
- The Compliance Advisor to the Committee on Compliance and Audit is to provide advice and consultation to the Committee in the following areas:
- Ethics, compliance and risk matters, including assistance in reviewing UC reports to the Committee regarding ethics, compliance and identification of risks and risk mitigation activities.
- Advice and review of appropriate metrics for assessing compliance within the University.
- Independent review of management's compliance with the University's corporate ethics, risk and compliance programs.
- General assistance with review of overall performance of the Senior Vice President-Chief Compliance and Audit Officer.
- General assistance with the Committee on Compliance and Audit's oversight of the University's corporate ethics and compliance program.