The purposes of the Audit Committee (the “Committee”) of the Board of Trustees (the “Board”) of the Robert Wood Johnson Foundation (the “Foundation”) are to assist the Board in fulfilling its oversight responsibilities relating to the integrity of the Foundation’s financial statements; its systems of internal accounting and financial controls; its processes and procedures for risk management; its compliance with legal and regulatory requirements; and the performance, qualification, and independence of the Foundation’s independent auditors.
II. Responsibilities and Duties
The Committee shall have the right to undertake all actions necessary to carry out the purposes of the Committee, including but not limited to:
- Be directly responsible for the appointment, compensation, oversight, and retention of the Foundation’s independent auditors. The independent auditors shall report directly to the Committee and shall meet separately with the Committee (without management) at least annually, or more frequently as the Committee may request.
- Evaluate annually the qualifications, performance, and independence of the independent auditors and discuss with the auditors any relationships that may impact auditor objectivity and independence.
- Approve prospectively all audit and non-audit services provided by the independent auditors, giving consideration to whether the performance of such services might adversely affect the independent auditors’ objectivity or independence. This responsibility may be fulfilled by the Committee’s Chair; services approved by the Chair should be reported to the Committee at its next scheduled meeting.
- Ensure proper rotation of the lead audit partner on the Foundation’s engagement.
- Review and discuss the Foundation’s annual financial statements and the related footnotes and disclosures with management and the independent auditors, including the quality, not just the acceptability, of the Foundation’s accounting principles, and the clarity and completeness of the financial statements and related disclosures.
- Obtain annually a report from the independent auditors regarding matters to be communicated under the Statements of Auditing Standards then in effect, and review with the independent auditors:
—any significant difficulties or disagreements with management in connection with the preparation of the financial statements;
—any formal communications between the audit team and the auditors’ national office regarding auditing or accounting issues;
—any recommendations regarding internal controls; and
—a summary of any alternative accounting treatments discussed with Foundation management, the ramifications of such treatments, and the treatment preferred by the independent auditors.
- Resolve disagreements, if any, between management and the independent auditors regarding financial reporting.
- Review new and significant accounting pronouncements that have an impact on the Foundation’s financial statements.
- Oversee and periodically evaluate the Foundation’s internal controls and procedures, including those related to risk management, cybersecurity, and programmatic activities.
- Oversee and periodically evaluate the Foundation’s processes for monitoring compliance with legal and regulatory requirements.
- Establish procedures for the receipt, retention, and treatment of complaints regarding the Foundation’s accounting, internal accounting controls, or auditing matters, including procedures for the confidential, anonymous submission by Foundation employees of concerns regarding questionable accounting or auditing matters.
- Monitor and periodically evaluate the Foundation’s conflict of interest policies and related procedures.
- Review with management any significant issues raised in connection with the Foundation’s required filings under the Internal Revenue Code.