About the Audit Committee
The Audit Committee is a subcommittee of the Town Council. Its responsibilities include:
- Creation of a culture with zero tolerance for fraud
- Evaluation of the fraud risks identified by the management team
- Implementation of anti-fraud measures
The Audit Committee is one of the ways that the Town Council fulfills its oversight responsibilities with respect to the Town’s financial reporting process. They receive information from an independent, external auditing firm, and use it to evaluate and assess the Town’s internal controls, which reduce the potential for fraud.
The Town encourages any employees who may have concerns about unethical behavior, actual or suspected fraud, or any other violations of the Town’s code of conduct or ethics policy by one or more members of management, to report these concerns to the Audit Committee; all such reports will remain anonymous.
The committee also receives reports whenever fraud or unethical conduct is identified by management, describing the nature, status, and eventual disposition of each case (the same reports will also be presented to the full Town Council in executive session). The Audit Committee typically has the ability and authority to investigate any alleged or suspected wrongdoing brought to its attention.
Accounting Principles Understanding
At least one member of the committee should always have an advanced understanding of generally accepted accounting principles, especially as they relate to governmental accounting and reporting. The rest of the committee should have at least a basic understanding of the same principles.
The Audit Committee can also name an Investigations Unit, charged with the responsibility of determining the facts in any report of fraud, unethical behavior, or violations of the Town’s code of conduct received by the Audit Committee.
Actions Constituting Fraud
Fraud refers to:
- Any dishonest or fraudulent act.
- Forgery or unauthorized alteration of any document or account belonging to the Town.
- Forgery or unauthorized alteration of a check, bank draft, or any other financial document.
- Misappropriation of funds, securities, supplies, or other assets (defalcation).
- Impropriety in the handling or reporting of money or financial transactions.
- Profiteering as a result of insider knowledge of Town activities.
- Disclosing confidential and proprietary information to outside parties.
- Disclosing securities activities engaged in or contemplated by the Town to outside parties.
- Accepting or seeking anything for personal use from contractors, vendors or persons providing services/materials to the Town.
- Exception: Gifts less than $50 in value.
- Destruction, removal or inappropriate use of records, furniture, fixtures, and equipment.
- Any similar or related inappropriate conduct.