AGENDA. Organizational Meeting of the Audit Committee Tuesday, February 6, 2018, 5:00 p.m. Board Room, Catholic Education Centre

Transcription

1 Organizational Meeting of the Audit Committee Tuesday, February 6, 2018, 5:00 p.m. Board Room, Catholic Education Centre The mission of the Dufferin-Peel Catholic District School Board, in partnership with the family and church, is to provide, in a responsible manner, a Catholic education which develops spiritual, intellectual, aesthetic, emotional, social, and physical capabilities of each individual to live fully today and to meet the challenges of the future, thus enriching the community. AGENDA A Call to Order by Associate Director Corporate Services and Chief Financial Officer and Treasurer - J. Hrajnik 1. Call to Order and Attendance 2. Acknowledgement of First Nations Sacred Territory 3. Opening Prayer 4. Election of Chair of the Audit Committee in Accordance with By-Laws J. Hrajnik 5. Election of Vice Chair of the Audit Committee in Accordance with By-Laws Chair B C Terms of Reference J. Cherepacha (Attached) Routine Matters 1. Declaration of Interest i) Letter of Declaration D. D Souza 2. Approval of Agenda i) Approval of Calendar Items 3. Approval of Minutes, Audit Committee Meeting September 26, 2017 i) Business Arising from the Minutes 4. Approval of Minutes, Audit Committee Meeting Teleconference November 14, 2017 i) Business Arising from the Minutes D Awards and Presentation E F Pastor s Remarks Delegations G Updates/Information/Reports from Trustees For Receipt i) Regular Reports ii) Good News Items H Information/Reports from Committees For Receipt Agenda Organizational Meeting of the Audit Committee February 6, 2018

2 I J K L Information/Reports from Administration For Receipt Trustee, Committee, Administration Reports, Requiring Action Notices of Motion Additional Business M Questions Asked of, and by, Board Members N Declared Interest Items O In Camera Session See In Camera Agenda P Rise and Report Q Future Meetings June 5, 2018 R Adjournment Agenda Organizational Meeting of the Audit Committee February 6, 2018

3 OPENING PRAYER Bless us as we gather today for this meeting. Guide our minds and hearts so that we will work for the good of our community, and help all Your people. Teach us to be generous in our outlook, courageous in face of difficulty, and wise in our decisions. Father, we praise You, for ever and ever. Amen.

4 B 1 Pg. 1 Organizational Meeting of the Audit Committee February 6, 2018 AUDIT COMMITTEE PROPOSED TERMS OF REFERENCE Strategic Goal: Stewardship of our Physical Environment, Catholic Community Engagement Administration/Operational BACKGROUND Annually staff brings forward the proposed Terms of Reference for the Audit Committee for consideration and approval by the members of Audit Committee. DISCUSSION In that regard, attached are the proposed Terms of Reference for Audit Committee for the 2018 year. THE FOLLOWING RECOMMENDATIONS ARE PROVIDED FOR CONSIDERATION: 1. THAT THE REPORT, AUDIT COMMITTEE PROPOSED TERMS OF REFERENCE 2018, BE RECEIVED. 2. THAT THE DUFFERIN-PEEL CATHOLIC DISTRICT SCHOOL BOARD ADOPT THE AUDIT COMMITTEE PROPOSED TERMS OF REFERENCE Prepared by: Submitted by: J. Cherepacha, Superintendent of Financial Services J. Cherepacha, Superintendent of Financial Services Date: February 6, 2018 Organizational Meeting of the Audit Committee February 6, 2018 Audit Committee Proposed Terms of Reference 2017/2018

5 B 1 Pg. 2 TERMS OF REFERENCE AUDIT COMMITTEE 2018 (Ontario Regulation 361/10 of the Education Act - requirements of Audit Committees) CHAIR: VICE CHAIR: BOARD MEMBERS: NON-BOARD MEMBERS: NON-VOTING MEMBERS: TBD TBD Sharon Hobin, Frank Di Cosola, Darryl D Souza Kevin Travers Rory Keilty Director of Education Associate Director of Corporate Services, Chief Financial Officer and Treasurer Superintendent of Financial Services Internal Auditor TERM OF OFFICE: Board Members appointed by the board of trustees annually, up to a 4 year term Non-Board Members up to a 3 year term as per Ontario Regulation 361/10 of the Education Act DECLARATION OF CONFLICTS: As described in Ontario Regulation 361/10 of the Education Act, every member of the audit committee shall, when appointed to the committee for the first time and at the first meeting in each fiscal year, submit a written declaration to the chair of the committee declaring whether they have a conflict of interest. Also, if a member becomes aware of a conflict after their appointment, they shall immediately disclose the conflict in writing to the chair. COMPOSITION: The Audit Committee shall consist of five (5) members comprised of three (3) trustees of the Board and two (2) non-board members of the community. The board of trustees will appoint three (3) trustee members to the audit committee annually. A person who is a non-board member is eligible to be appointed to the audit committee only if they: Have accounting, financial management or other relevant business experience that would enable them to understand the accounting and auditing standards applicable to the board; Are not an employee or officer of the Board or of any other board at the time of the appointment; Do not have a conflict of interest (does not have a parent, child or spouse who is employed by the Board) at the time of appointment; Was identified by the selection committee as identified in Ontario Regulation 361/10. CHAIR: In each fiscal year at the first meeting of the audit committee following the inaugural or organizational meeting of the Board, the members of the committee shall elect the chair and the vice chair of the committee for the fiscal year from among the members of the committee.

6 VACANCIES: For audit committee vacancies refer to Ontario Regulation 361/10 paragraph 8. MEETINGS: The audit committee will meet at least three (3) times in each fiscal year, or at the call of the chair, with authority to convene meetings as circumstances require and in accordance with Ontario Regulation 361/10 of the Education Act. The committee will invite members of management, auditors or others to attend meetings and provide pertinent information, as necessary. The committee may hold private meetings with auditors, the entire board of trustees and executive council. Meeting agendas will be prepared and provided in advance to committee members as well as the board of trustees, along with appropriate briefing materials. Minutes will be prepared and distributed to the board of trustees. Minutes will be approved by the board of trustees. Each member of the audit committee has one vote. In the event of a tie vote, the chair is entitled to cast a second vote. A majority of the members of the audit committee that includes at least one member who is not a board member constitutes a quorum for meetings of the committee. MANDATE: To assist the board of trustees in overseeing and objectively assessing the performance of the board, its management and its auditors and specific responsibilities for the following activities: i) oversight of appropriate accounting practices and financial reporting, ii) ensuring internal controls are in place to mitigate financial risk, iii) the internal and external audit processes, iv) the process for monitoring compliance with federal and provincial laws and regulations, v) recommend appointment of the external auditor to the board of trustees, vi) B 1 Pg. 3 the process for monitoring the Board s policies, procedures, regulations and code of conduct from an audit perspective, vii) the establishment and maintenance of lines of communication between the board of trustees and its external auditor, senior management, internal auditor and regional internal audit, viii) the safeguarding of Board assets, ix) the annual and/or multi-year audit plan of the Board, x) the audited financial statements of the Board. DUTIES: The Audit Committee will, (1) Review the annual audited financial statements of the Board prior to reporting to the board of trustees, and consider whether they are complete, and consistent with information known to committee members. The committee will make recommendations to the board of trustees for the approval of all annual audited financial statements. (2) Ensure risk assessment and risk management policies align with internal controls. (3) Review the scope of the internal and external auditor s reviews of the Board s internal controls, any significant findings and recommendations by the internal auditors and the responses of the Board s staff to those findings and recommendations. (4) Review the overall effectiveness of the Board s internal controls, including information technology system security and control.

7 B 1 Pg. 4 (5) Review with senior management, the internal auditors (including RIAT) mandate, activities, staffing, and organizational structure of the internal audit function. The audit committee will make recommendations to the board of trustees on the content of the annual audit plan. They will also review whether there are any unjustified restrictions or limitations on the role of the internal auditor. (6) Review the external auditors, terms of engagement, fees and proposed audit scope and approach and any non-audit services provided, including coordination of audit effort with internal audit. Review the performance of the external auditor, and make recommendations to the board of trustees on the appointment or discharge of the external auditor. On an as needed basis, meet separately with the external auditor to discuss any matters that the committee or auditor believe should be discussed privately. (7) Review the effectiveness of the Board s internal operating procedures for monitoring compliance with federal and provincial laws and regulations as well as the Board s policies, procedures, regulations and code of conduct. Review the results of management's investigation and follow-up of any instances of noncompliance. Review the findings of any examinations by regulatory agencies, and any auditor observations. Obtain regular updates from management and Board legal counsel regarding compliance matters. (8) Receive and review internal audit plan and results of internal audit activities and follow-up on recommendations. (9) In accordance with Ontario Regulation 361/10 of the Education Act, the audit committee will report to the board of trustees on items such as the annual audit plan and summary of work performed by the board s internal auditor (including RIAT), with a copy submitted to the Ministry of Education. In addition, the committee is required to report to the board of trustees on items such as a summary of work performed by the committee, an assessment of the Board s progress in addressing findings and recommendations made by the internal or external auditor and attendance record of committee members. (10) Review and assess the adequacy of the audit committee s terms of reference annually, and ensure appropriate disclosure as may be required by law or regulation. Confirm annually that all responsibilities outlined in the terms of reference and Ontario Regulation 361/10 have been carried out. (11) Subject to the approval of the board of trustees, obtain legal advice, retain independent accountants or other professionals to advise or assist the committee. (12) Report to the board of trustees annually, and at any other time that may be required, on the committee s performance of its duties. Reports to: The board of trustees

8 C 3 Pg. 1 Minutes of Audit Committee Meeting Tuesday, September 26, :00 p.m. Board Room, Catholic Education Centre Chair: Vice Chair: (Non Board Member) Board Members: Non Board Member: Director of Education: Associate Director of Corporate Services, Chief Financial Officer and Treasurer: Associate Director, Instructional Services: Superintendents: General Counsel: Staff: Recorder: E. O Toole K. Travers S. Hobin F. Di Cosola D. D Souza R. Keilty M. Mazzorato J. Hrajnik D. Amaral J. Cherepacha M. Beck B. Hester K. Sun S. McGuire A Routine Matters 1. Call to Order and Attendance Chair E. O Toole called the meeting to order at 5:00 p.m. 2. Acknowledgement of First Nations Sacred Territory Chair E. O Toole acknowledged the sacred territory of the Mississaugas of the New Credit. 3. Opening Prayer Chair E. O Toole led the Opening Prayer. 4. Appointment of External Members To The Audit Committee J. Cherepacha (The report was distributed at the meeting.) Moved by S. Hobin THAT THE REPORT APPOINTMENT OF EXTERNAL MEMBER TO THE AUDIT COMMITTEE BE RECEIVED. Superintendent J. Cherepacha presented this report. This report recommends the appointment of R. Keily as an external non-board member to the audit committee for a three year term effective September 26, 2017 to September 26, Minutes of the Audit Committee Meeting September 26, 2017

9 C 3 Pg. 2 Moved by F. Di Cosola THAT THE COMMITTEE RECOMMEND THE BOARD APPROVE THE APPOINTMENT OF RORY T. KEILTY, FCPA FCA, AS AN EXTERNAL NON-BOARD MEMBER OF THE AUDIT COMMITTEE FOR A THREE (3) YEAR TERM EFFECTIVE SEPTEMBER 26, 2017 TO SEPTEMBER 26, R. Keilty joined the meeting in progress. 5. Declaration of Interest Letter of Declaration E. O Toole Letter of Declaration K. Travers Letter of Declaration F. Di Cosola Letter of Declaration S. Hobin Letter of Declaration R. Keilty J. Cherepacha, Superintendent of Financial Services, confirmed receiving the signed Letters of Declaration from above noted members. 6. Approval of the Agenda Addition to the Open Session Agenda: A 4 Appointment of External Member To The Audit Committee J. Cherepacha Renumbering the Open Session Agenda Items: A 5 Declaration of Interest i) Letter of Declaration E. O Toole ii) Letter of Declaration K. Travers iii) Letter of Declaration F. Di Cosola iv) Letter of Declaration S. Hobin v) Letter of Declaration R. Keilty A 6 Approval of Agenda i) Approval of Calendar Items A 7 Minutes of the Audit Committee Meeting on May 9, 2017 i) Business Arising from the Minutes Distributed at the meeting: H 1 Addendum Copy of Client Service Agreement Moved by F. Di Cosola THAT THE AGENDA BE APPROVED, AS AMENDED. i) Approval of Calendar Items 7. Minutes of the Audit Committee on May 9, 2017 Moved by K. Travers THAT THE MINUTES OF THE AUDIT COMMITTEE ON MAY 9, 2017 BE RECEIVED. Minutes of the Audit Committee Meeting September 26, 2017

10 C 3 Pg. 3 i) Business Arising from the Minutes B C D E F G Awards and Presentations Pastor s Remarks Delegations Information/Reports from Trustees For Receipt i) Regular Reports ii) Good News Items Information/Reports from Committees For Receipt Information/Reports from Administration For Receipt 1. Compliance Report J. Cherepacha Moved by K. Travers THAT THE REPORT ENTITLED COMPLIANCE REPORT BE RECEIVED. Superintendent of Financial Services, J. Cherepacha, indicated the letter signed by the Director of Education is provided to the Audit Committee on an annual basis. Ontario Regulation 361/10 requires confirmation by the board s Director of Education that all statutory requirements have been met. H Trustee, Committee, Administration Reports, Requiring Action 1. Audit Service Plan for the Year Ended August 31, 2017 Deloitte Addendum Copy of Client Service Agreement (The report was distributed at the meeting.) Moved by R. Keilty THAT THE AUDIT SERVICE PLAN FOR THE YEAR ENDED AUGUST 31, 2017 BE RECEIVED. Superintendent J. Cherepacha introduced the report and welcomed Steve Stewart, partner at Deloitte LLP, to present the Audit Service Plan for the year ended August 31, S. Stewart reviewed the plan in detail highlighting elements of audit process and audit risks. Questions asked by committee members were addressed by S. Stewart. Moved by S. Hobin Minutes of the Audit Committee Meeting September 26, 2017

11 C 3 Pg. 4 THAT THE AUDIT COMMITTEE RECOMMEND THAT THE BOARD APPROVE THE AUDIT SERVICE PLAN FOR THE YEAR ENDED AUGUST 31, I J K L M Notices of Motion Additional Business Questions Asked Of, And By, Board Members Declared Interest Items In Camera Session Moved by K. Travers THAT THE COMMITTEE RESOLVE INTO THE IN CAMERA SESSION. N Rise and Report Received Minutes of the In Camera Session of the Audit Committee Meeting, September 26, 2017 and audit reports. Moved by F. Di Cosola THAT THE REPORT OF THE IN CAMERA SESSION BE PRESENTED AND THAT THE COMMITTEE S RECOMMENDATIONS BE ADOPTED. O P Future Meetings November 14, 2017 (Teleconference) November 28, 2017 February 6, 2018 June 5, 2018 Adjournment Moved by R. Keilty THAT THE MEETING OF THE AUDIT COMMITTEE BE ADJOURNED AT 6:40 p.m. Minutes of the Audit Committee Meeting September 26, 2017

12 C 4 Pg. 1 Minutes of the Audit Committee Meeting Tuesday, November 14, 2017, 3:00 p.m. Teleconference, Catholic Education Centre Room 105 Chair: Vice Chair: (Non Board Member) Board Member: Non Board Member: Associate Director of Corporate Services, Chief Financial Officer and Treasurer: Associate Director of Instructional Services: Superintendent: Staff: Recorder: E. O Toole K. Travers S. Hobin R. Keilty J. Hrajnik D. Amaral J. Cherepacha B. Hester K. Sun E. Cyrus S. McGuire A Routine Matters 1. Call to Order and Attendance Chair E. O Toole was in attendance via teleconference and Vice Chair K. Travers assumed the Chair. Vice Chair K. Travers called the meeting to order at 3:01 p.m. 2. Acknowledgement of First Nations Sacred Territory Committee Vice Chair K. Travers acknowledged the sacred territory of the Mississaugas of the Credit. 3. Opening Prayer Vice Chair K. Travers led in the opening prayer. 4. Declaration of Interest 5. Approval of the Agenda Moved by E. O Toole THAT THE AGENDA BE APPROVED. i) Approval of Calendar Items Minutes Audit Committee Meeting, November 14, 2017

13 C 4 Pg Minutes of the Audit Committee Meeting i) Business Arising from the Minutes B C D E F G H Awards and Presentations Pastor s Remarks Delegations Information/Reports from Trustees for Receipt Information/Reports from Committees for Receipt Information/Reports from Administration for Receipt Trustee, Committee, Administration Reports, Requiring Action 1. Financial Statements for the Year Ended August 31, 2017 J. Cherepacha Moved by S. Hobin THAT THE REPORT, AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2017, BE RECEIVED. J. Cherepacha, Superintendent of Financial Services, acknowledged the Deloitte LLP Senior Partner and Manager, Steve Stewart and Margaret Corner, were in attendance. Superintendent J. Cherepacha, introduced this report that presents the audited consolidated financial statements for the year ended August 31, 2017, and, the Deloitte LLP year-end audit communication report. Superintendent J. Cherepacha thanked the Financial Services team for the hard work and efforts that went into having these financial statements completed in a timely manner. Once approved, these are filed with the Ministry of Education and are posted on the Board website. Superintendent J. Cherepacha reported that there are no significant differences in statement format relative to previous years and financial statement reporting requirements remain similar to the prior year. The Board has achieved compliance from a balanced budget perspective as well as met all Ministry enveloping requirements. There are no management issues to report. Minutes Audit Committee Meeting, November 14, 2017

14 Superintendent J. Cherepacha commented that budget compared to actual results for the Board show a small surplus position, resulting from a one-time reduction to employee future benefit liabilities (EFB). The change in the EFB is related to the transition of employee benefits to the Employee Life Health Trust (ELHT). Superintendent J. Cherepacha introduced B. Hester, General Manager of Financial Services, to review the key points on the financial statements. B. Hester provided an overview of the financial statements and significant year over year changes were explained for the committee. Trustee S. Hobin inquired what would be included in Accounts Receivable? B. Hester answered that the majority would consist of Education Program Other (EPO) Grants from the Ministry of Education. Vice Chair K. Travers introduced Steve Stewart and Margaret Corner from Deloitte LLP, to review the year-end communication report. S. Stewart commented that the audit has been conducted in accordance with the audit plan that was presented to the audit committee at the meeting held on September 26, S. Stewart presented the auditor s year-end communication report. For the fiscal year-end , there were three areas of significant audit risk. Staff worked diligently throughout the year to ensure all internal controls were monitored and adhered to and as a result, there were no major findings. M. Corner presented the significant audit risks report which included revenue recognition, management override of controls, and deferred capital contributions. The results of their testing was that these risks were appropriately addressed. No instances of fraud or illegal acts were found during the course of the audit. S. Stewart commented that the Office of the Auditor General of Ontario (OAGO) had reached out to auditors at several boards across the province to discuss audit findings and Dufferin-Peel Catholic District School Board was one of them. Questions asked were related to valuation of capital assets and the impact of new ELHTs. Of particular interest, was the extent to which boards may have school buildings sitting empty. The OAGO was also inquiring about the benefit trust impact on the financial statements. The OAGO was content with the answers provided. Vice Chair K. Travers inquired, with respect to the independence letter, if Deloitte LLP does any other audit related services for the Board, and if so, is there is a policy in terms of approval? Superintendent J. Cherepacha answered that the Board would be obligated to follow the Broader Public Sector (BPS) Procurement Directives. Moved by S. Hobin C 4 Pg. 3 THAT THE AUDIT COMMITTEE RECOMMEND TO THE BOARD OF TRUSTEES THAT THEY APPROVE THE AUDITED FINANCIAL STATEMENTS AND RELATED INFORMATION OF THE BOARD FOR THE YEAR ENDED AUGUST 31, I Notices of Motion Minutes Audit Committee Meeting, November 14, 2017

15 C 4 Pg. 4 J Additional Business K L Questions Asked of, and by, Board Members Trustee E. O Toole asked if the Audit Committee Meeting scheduled for November 28, 2017 will be cancelled? Superintendent J. Cherepacha replied that, in consultation with the Chair, a decision had been made to cancel the November 28 th meeting. Declared Interest Items M In Camera Session N Rise and Report O P Future Meetings February 6, 2018 June 5, 2018 Adjournment Moved by R. Keilty THAT THE MEETING BE ADJOURNED AT 3:40 PM. Minutes Audit Committee Meeting, November 14, 2017