The primary function of the Audit and Compliance Committee (the "Committee") is to provide oversight of Baylor's financial reporting process, hiring, performance and independence of the external auditor, system of internal controls, risk management, compliance with laws and regulations, standards of conduct and other risks (strategic, compliance, operational, and reputational). In discharging its duties, the Committee is responsible for (1) reviewing and understanding the University's financial statements; (2) assuring the Board the statements reflect Baylor's financial condition; (3) determining the adequacy of internal controls, including those established for financial information systems; (4) assuring the Board that any significant noncompliance with regulatory matters has been brought to their attention; and (5) ensuring adherence to Baylor's conflict-of-interest policy.
The Committee is empowered, in consultation with the Chair of the Board, or the Vice Chair of the Board in the event the Chair is the subject of the Committee's investigation, to inquire into any matter it considers appropriate to carry out its responsibilities, with access to all books, records, facilities and personnel of the university. In addition to retaining the University's independent external auditor, the Committee shall be entitled to retain independent counsel and/or other experts at its sole discretion to aid the Committee in (i) addressing legal or compliance matters that may have a material impact on the University's financial statements or risk management or (ii) conducting investigations of complaints of inquiries involving any administrative official, office or personnel. In addition, the University shall provide adequate resources to support the Committee's activities, including compensation of the University's independent external auditor, and any counsel, other auditors and other advisors retained by the Committee.