1. Authority and Accountability
   
   

   The Finance and Audit Committee (FAC) is established under Bylaw 3. The committee is responsible to assist Council in fulfilling its financial stewardship and risk oversight responsibilities.

2. Establishment (Council Delegation)
   
   

   The committee is delegated authority from Council via Bylaw 3. It is a standing committee of Council. The committee makes recommendations to Council regarding the duties delegated to it by Council.

3. Composition
   
   

   3.1. The committee shall comprise six (6) members.

   3.2. The committee shall strive for an equal membership of registrant members and public members.

   3.3. Any committee member may serve as Chair.

   3.4. The Chair shall be selected by Council on recommendation from the Nominating Committee in accordance with the governance committee chair selection process approved by Council.

4. Eligibility
   
   

   4.1. Members must be a current member of Council.

   4.2. Members shall meet the competence requirements defined in the Council and Committees Selection Policy approved by Council.

   4.3. Members shall be financially literate. Financially literate means having the ability to read and comprehend not-for-profit financial statements and a reasonable understanding of accounting and finance issues within a not-for-profit organization. Ideally, at least one member shall be a financial expert. This means they will have an accounting designation and have the ability to prepare financial statements of comparable complexity and breadth to the issues raised by the College’s financial statements.

   4.4. Council is responsible for removal of members.

5. Term
   
   

   5.1. The term of office for committee members is three (3) years or until the end of the Council member’s term, whichever is shorter.

   5.2. The term of the Chair is two (2) years or until the end of the Council member’s term, whichever is shorter.

   5.3. All committee members may serve one (1) additional term.

   5.4. The Chair may serve one (1) additional term or until the Chair’s term of appointment as a member of Council expires, whichever is shorter.

6. Quorum
   
   

   A quorum is a majority of members.

7. Meetings
   
   

   7.1. The committee meets not less than four times per year, and at such other times as may be requested by the Chair.

   7.2. Non-members: The Chief Operating Officer (COO), other senior management as appropriate and external auditor have the right to receive notice of, attend and provide expertise or insight regarding operational matters at all committee meetings.

   7.3. The committee shall establish in consultation with management a schedule of meetings each year in order to discharge its responsibilities.

   7.4. The Chair will establish the agenda and the annual timetable for distribution to the committee members. Ordinarily, the Chair will set the agenda in consultation with the COO.

   7.5. The Chair will provide or delegate to management support to send an agenda, together with materials relating to the subject matter of each meeting.

   7.6. At the discretion of the Chair in consultation with management, the committee meets in person, by video conference, and/or by teleconference.

   7.7. The Chair will provide or delegate to management support to prepare minutes for all meetings to document the committee’s discharge of its responsibilities.

   7.8. The Chair will circulate in draft form, the meeting minutes to all committee members to ensure an accurate final record. The minutes will then be approved at the next scheduled meeting of the committee.

   7.9. All decisions are made by majority vote.

   7.10. All committee and non-committee members must maintain confidentiality of all information from committee meetings.

8. Duties and Powers
   
   

   8.1. The committee acts on behalf of Council in an oversight role on financial matters. The committee assists Council in fulfilling its financial stewardship oversight responsibilities by:

   8.1.1. Gaining reasonable assurance regarding the integrity of the College’s financial reporting and financial management, including audits and controls.

   8.1.2. Reviewing the financial information which will be provided to stakeholders, the systems of corporate controls established which management and Council have established, and the audit process.

   8.1.3. Having principal oversight responsibility with respect to certain material financial matters of the College, including investments.

   8.1.4. Assessing the College’s financial performance against the agreed capital and operating budgets.

   8.1.5. Assessing the College’s business continuity planning (Appendix 1).

   8.1.6. Assessing the College’s compliance to ensure the management of its investments within the investment limitations (Appendix 2).

   8.2. The committee affords management, the external auditor and regulators a direct conduit to Council, without allocating to the committee the ultimate decision-making powers of Council, except as may be provided for herein, or the responsibilities which have already been appropriately delegated to management. The College’s auditors shall be advised of the names of the committee members and will receive notice of and be invited as necessary to attend meetings of the committee, and to be heard at those meetings on matters relating to the Auditor's duties.

   8.3. The committee has the authority to:

   8.3.1. Make recommendations to Council with regard to financial and audit issues.

   8.3.2. Authorize investigations or studies of matters that reflect on the financial integrity of the College, or such other matters as deemed appropriate by Council. This includes the authority to investigate and/or study items raised through the GP3 - Safe Disclosure - Whistleblower Protocol.

   8.3.3. Obtain expertise and assistance from outside legal, governance, financial or other advisors as required to assist in the execution of committee responsibilities. Use of these services, along with associated costs and contractual obligations shall be reported to Council periodically.

   8.4. Responsibilities related to Financial Reporting:

   The committee will:

   8.4.1. Gain reasonable assurance regarding the integrity of the College’s financial statements and financial reporting process and the College’s systems of internal accounting and financial controls;

   8.4.2. Gain reasonable assurance that the College complies with all applicable laws, regulations, rules, policies and other requirements of governments, and regulatory agencies relating to financial reporting and disclosure;

   8.4.3. Gain reasonable assurance that the accounting principles, significant judgments and disclosures which underlie or are incorporated into the College’s financial statements are the most appropriate in the prevailing circumstances;

   8.4.4. Review the College’s annual financial statements with management and the external auditors to gain reasonable assurance that the statements are accurate, complete, represent fairly the College’s financial position and performance and are in accordance with Accounting Standards for Not-for-Profit Organizations (or applicable approved accounting standards). Together with management’s discussion and analysis, ensure that the statements constitute a fair presentation of the College’s financial condition and report thereon to Council before such financial statements are approved by Council;

   8.4.5. Review the College's internal quarterly financial statements with management in relation to the College's financial forecast;

   8.4.6. Receive from the external auditors, reports on their review of the annual financial statements;

   8.4.7. Review the College’s audited financial statements prior to their approval by Council;

   8.4.8. Receive and review from management a copy of the representation letter provided to the external auditors and receive from management any additional representations required by the committee;

   8.4.9. Review major issues regarding accounting principles and financial statement presentation including any significant changes in the selection or application of accounting principles to be observed in the preparation of the College’s accounts; and

   8.4.10. Review with management and the external auditors the degree of conservatism of the College’s underlying accounting policies, key estimates and judgments and reserves.

   8.5. Responsibilities related to Controls:

   The committee will:

   8.5.1. Gain reasonable assurance as to the effectiveness of internal controls as these relate to financial reporting and integrity;

   8.5.2. Review the plans of the external auditors to gain reasonable assurance that the combined evaluation and testing of internal and disclosure controls is comprehensive, coordinated, and cost-effective; and

   8.5.3. Receive regular reports from management, the external auditors and its legal department on all significant control deviations or indications/detection of fraud and the corrective activity undertaken in respect thereto.

   8.6. Responsibilities related to Relationship with External Auditors:

   The committee will:

   8.6.1. Recommend to Council the appointment of the external auditors;

   8.6.2. Approve the remuneration and the terms of engagement of the external auditors;

   8.6.3. Review the performance of the external auditors annually or more frequently as required;

   8.6.4. Receive a report annually from the external auditors with respect to their independence, such report to include a disclosure of all engagements (and fees related thereto) for non-audit services by the College;

   8.6.5. Review with the external auditor and approve its annual audit plan for the College’s financial statements, and, thereafter, the results of the external audits of the College, any significant problems encountered in performing the audit, and the contents of any management letters issued by the external auditor to the College, and management's response thereto;

   8.6.6. Review with the external auditor the contents of their annual audit reports, and with the regulator the contents of regulatory examination reports and review any significant recommendations from the external auditor or the regulator to strengthen the internal controls of the College;

   8.6.7. Review any unresolved significant issues between management and the external auditor or the regulator that could affect the financial reporting or internal controls of the College;

   8.6.8. Discuss with management and the external auditors the timing and the process for implementing the rotation of the lead audit partner, the peer review (concurring or reviewing) partner and any other active audit engagement team partner;

   8.6.9. Review with the external auditors the scope of the audit, the areas of special emphasis to be addressed in the audit, and the materiality levels which the external auditors propose to employ; and

   8.6.10. Meet briefly, as required with the external auditors in the absence of management to determine that no management restrictions have been placed on the scope and extent of the audit examinations by the external auditors or the reporting of their findings to the committee.

   8.7. Responsibilities related to Risk Oversight:

   The committee will:

   8.7.1. Acknowledge that it is the responsibility of management, in consultation with Council, to identify the principal risks facing the College, determine the College’s tolerance for risk and approve risk management policies, the committee shall focus on financial risk and gain reasonable assurance that financial risk is being effectively managed or controlled by management reviewing with Council:

   8.7.1.1. The College’s tolerance for financial and other categories of risk;

   8.7.1.2. Its assessment of the significant financial and other categories of risks facing the corporation;

   8.7.1.3. The College’s policies and any proposed changes thereto for managing those significant financial risks;

   8.7.1.4. Its plans, processes and programs to manage and control such risks.

   8.7.2. Review policies and compliance that require significant actual or potential liabilities, contingent or otherwise, to be reported to Council in a timely fashion;

   8.7.3. Review regularly with Council, the external auditors and the College’s legal counsel, any legal claim or other contingency, that could have a material effect upon the financial position or operating results of the College and the manner in which these matters have been disclosed in the financial statements.

   8.8. Responsibilities related to Compliance with laws, including statutes and regulations:

   The committee will:

   8.8.1. Review regular reports from management and others with respect to the College’s compliance with laws, including statutes and regulations and gain reasonable assurance that the College’s policies, procedures and programs in relation thereto are operating effectively and that the College’s provisions with respect to such matters are sufficient and appropriate;

   8.8.2. Monitor compliance with the College’s Code of Conduct with respect to the following issues:

   8.8.2.1. conflicts of interest, including transactions and agreements in which a Council member has a material interest;

   8.8.2.2. protection and proper use and exploitation of the College’s assets and opportunities;

   8.8.2.3. fair and ethical dealing with the College’s suppliers and employees;

   8.8.2.4. compliance with applicable laws, rules and regulations; and

   8.8.2.5. reporting of any illegal or unethical behavior or other breaches of the Code of Conduct.

   8.8.3. Discuss with the Counsel any significant legal, compliance or regulatory matters that may have a material effect on the financial statements or the business and affairs of the College.

   8.9. Responsibilities related to Other Duties:

   The committee will:

   8.9.1. Periodically review the form, content and level of detail of financial reports to Council;

   8.9.2. Review annually the expenses of the Chair and the Chief Executive Officer & Registrar to gain reasonable assurance as to the reasonableness of such expenses;

   8.9.3. After consultation with the COO and the external auditors, gain reasonable assurance, at least annually, of the quality and sufficiency of the College’s accounting and financial personnel and other resources;

   8.9.4. Review in advance the appointment of the College’s senior financial executives;

   8.9.5. Investigate any matters that, in the committee’s discretion, fall within the committee’s duties;

   8.9.6. Review and approve the College’s policies with respect to the hiring of partners, employees and former partners and employees of the current and former external auditors;

   8.9.7. Establish procedures for (see GP3 Safe Disclosure - Whistleblower Protocol):

   8.9.7.1. the confidential receipt, retention and treatment of complaints received by the College regarding the College’s accounting, internal accounting controls or auditing matters; and

   8.9.7.2. the confidential anonymous submission, retention and treatment of concerns by employees regarding questionable accounting or auditing matters; and require that all such matters be reported to the committee together with a description of the resolution of the complaints or concerns.

   8.9.8. Communicate its expectations to management and the external auditors with respect to the nature, timing and extent of its information needs. The committee expects that written materials will be received from management and external auditors at least one week in advance of meeting dates.

   8.9.9. Review and update this Charter on a regular basis for approval by Council.

   8.9.10. Gain reasonable assurance the committee receives education and training as necessary to enable it to fulfill its mandate effectively.

   8.9.11. Evaluate its own performance periodically and develop criteria for such evaluation.

   8.9.12. Report to Council at least four (4) times per year or as otherwise directed by Council regarding its activities.

   9. Reporting

   The committee is accountable to Council and the committee chair will provide a formal report on the committee’s activities at each quarterly Council meeting.

Appendix 1 – Business Continuity Planning

Purpose

Major incidents can disrupt the College’s services, affecting operations, employees, members, stakeholders, communities and the environment. The College is responsible to plan for the preservation and rebuilding of its critical activities and essential functions used to provide regulatory services for the nursing profession in Alberta. To minimize the impact of disruptions to such activities, the Business Recovery and Continuity Policy has been established to:

• Define structure and authority to ensure business resilient services.
• Organize efforts to manage through a disruption when the need arises.
• Quickly and safely resume operations after a disruption.

The policy provides a clear commitment to establishing a Business Continuity Management (BCM) Program within the College that will enable the organization to:

• Act as a socially responsible employer by taking reasonable precautions to protect employees, members, assets, and the environment.
• Continue to deliver a minimum, acceptable level of services in the event of a disruptive incident, prior to establishing a ‘business-as-usual’ situation.
• Achieve a business continuity capability which can provide an effective response to major disruptions and that meets the changing situational reality.
• Establish a clearly defined framework for the ongoing Business Continuity Management Program capability.

Principles

The College will:

• Continue operations without unduly putting at risk people and the environment.
• Improve the resilience of the organization’s infrastructure.
• Reduce the operational and financial impact of any disruption.
• Continue to provide key services to the College’s stakeholders in times of disruption.
• Make the best use of personnel and other resources in times when both might be scarce.
• Manage disruptive incidents according to the College’s policies, guidelines and templates.
• Manage disruptive incidents locally in the organization whenever reasonably possible.

Procedures

The College will take an enterprise risk management approach to business recovery and continuity. This includes:

• Risk mitigation – the College will work to reduce risk through BCM preparedness, analysis of risks, developing incident scenarios and business impact analysis.
• Business Continuity Management (BCM) Program - the College will establish plans and procedures to enable it to respond, recover/resume and restore services following a critical incident. This will include:
  • Emergency Response Plan (ERP) to address the College’s immediate actions.
  • Crisis Management Plan (CMP) and Crisis Communications Plan (CCP) to outline the College’s management and communications procedures/protocols during the response, recovery and resumption phases of a critical incident.
  • Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) to support the College’s activities during the recovery phase and during the restoration phase of a critical incident.
  • Preparedness - As part of its planning for critical incident response and the restoration of services, the College will build awareness of the potential for critical incidents, provide training and conduct emergency response drills for employees, key volunteers and Council members.

Assurance

To ensure the College’s Business Continuity Management (BCM) Program remains effective and that all critical business activities are covered and compliant with relevant rules and regulations, the BCM Program will be reviewed annually and the findings reported by management to Council. Business Continuity Management will be an iterative process with risks and their potential impacts updated regularly and plans developed for further improvement to the College’s response. Plans will be approved by senior management and reported to Council (at least annually).

Responsibilities

The CEO & Registrar is responsible to ensure that the Business Recovery and Continuity Policy is implemented and updated as needed.

Definitions

For purposes of this policy, the following definitions apply:

Appendix 2 – Investment Limitations

The College is governed by Council which delegates the oversight of the College’s investment performance to the Finance and Audit Committee (“Committee”). The committee through established investment parameters holds the CEO and Registrar, and the College’s management accountable to achieve the key investment objectives of:

• Management will ensure that an investment strategy is established that achieves Council’s investment objectives, cashflow needs, and risk tolerances.
• Management will ensure that the strategy is reviewed and/or revised at least on an annual basis.
• All funds available for investment will be invested in an appropriate mix of short-term and long-term investments as agreed to by the committee.
• Investment advisory is established through the committee to oversee the investment parameters and management of the investments.
• Management will retain the service(s) of an external professional investment manager(s) to select and direct the investment of the fund(s) in accordance with the objectives established in this policy, and in line with the following guidelines:
  • The investment object is to ensure all funds are prudently invested in accordance with this policy and that investments are selected to match the anticipated cashflow requirements, risk tolerance and investment objectives of the College.
  • This objective necessitates incurring generally accepted investment risks through ownership of financial securities to preserve capital amounts, obtain a reasonable rate of return, and provide growth and income that align with College needs and obligations.
  • All short-term funds are maintained in a bank, treasury branch, credit union, loan corporation or trust corporation. To facilitate the College’s cash requirements, interest-bearing cash or liquid, high-quality cash equivalents will be maintained at greater than 40% of the College’s expenditure budget.
  • The primary investment objective for long-term funds is the preservation of capital in real dollar (inflation adjusted) terms in perpetuity.
  • The secondary investment objective for long-term funds is to achieve modest growth in real dollar terms over time.
• Long-term investments based on the above primary and secondary objectives require a low-risk, conservative investment strategy which emphasizes fund preservation with a modest growth component.
• Long-term investment portfolio target allocation mix is:
  • 65% Fixed Income, 35% Equity
• Ranges around each target allocation permit:
  • 50% to 80% allocation for Fixed Income, and
  • 20% to 40% allocation for Equity
• Ranges around each target allocated for fixed income and equity enable cash balances from matured fixed income funds or sold equity funds to be held until appropriate timing to purchase new funds (i.e. to remain compliant with policy until future purchases).
• For compliance purposes, when the asset allocation of long-term investments reaches or exceeds the top of range for greater than 90 days, management shall engage in discussion with the committee regarding (1) the appropriateness of the target range given the context of the financial environment, and (2) a plan forward.
• Benchmarks will be determined and used as a comparison for performance reviews.
• No acquisition of land as an investment without prior approval of Council.
• There shall be no investment where the liability is beyond the amount invested.

Investment Policy Compliance Reporting

The committee provides oversight of Investment Policy Compliance through confirmation provided by investment manager(s) on annual basis regarding their compliance with the investment objectives and limitations.