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Gouverneur Bancorp, Inc. ~ Audit Committee Charter |
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Return to Investor Information I. Purpose And Overall Responsibilities The
primary purpose of the Audit Committee (the "Committee") of
the Board of Directors (the "Board") of Gouverneur Bancorp,
Inc. (the "Company") is to assist the Board in fulfilling
its oversight responsibilities to shareholders, potential shareholders
and the investment community by reviewing: (i) the periodic financial
reports and other financial information provided by the Company to regulatory
or governmental bodies, including the Securities and Exchange Commission
("SEC") or to the public; (ii) the Company’s system of internal
controls established by management and the Board; and (iii) the Company’s
auditing, accounting and financial reporting processes (both internal
and external) generally. In addition, the Committee provides an avenue
for communication between internal audit, the Company’s independent
accountants, financial management, and the Board. The Committee should
have a clear understanding with the independent accountants that they
must maintain an open and transparent relationship with the Committee,
and that the ultimate accountability of the independent accountants
is to the Board and the Committee, as representatives of the Company’s
shareholders. The Committee will make regular reports to the Board concerning
its activities. Consistent with this function, the Committee should
encourage continuous improvement of, and should foster adherence to,
the Company’s policies, procedures and practices at all levels. While
the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits
or to determine that the Company’s financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
accountants. The
Committee shall operate pursuant to a written charter setting forth
its duties and responsibilities and this charter shall be reviewed for
adequacy, modified as necessary, and approved by the full Board of Directors
annually. The Committee shall assess the effectiveness of the
Charter periodically and include it as an appendix to its annual proxy
statement at least once every three years in accordance with SEC rules. II. Composition The
Committee shall be comprised of at least three directors, or more as
determined by the Board. The members of the Committee shall meet the
independence and experience requirements of the SEC and American Stock
Exchange ("AMEX") and contain the requisite number of independent
members as proscribed by the SEC and AMEX. The members of the Committee
will be elected annually at the organizational meeting of the full Board
held after the annual stockholders’ meeting. One of the members of
the Committee will be elected Committee Chair by the Board. III. Authority The
Committee is granted the authority to investigate any matter or activity
involving financial accounting and financial reporting, as well as the
internal controls of the Company. In that regard, the Committee will
have the authority to approve the retention of external professionals
to render advice and counsel in such matters. All employees must cooperate
with any such investigation as requested by members of the Committee.
IV. MEETINGS The
Committee shall meet at least four times annually, or more frequently
as the Committee may deem necessary. The Committee is to also meet in
separate executive sessions with the chief financial officer and independent
accountants at least once each year and at all other times when deemed
appropriate. As necessary or desirable, the Committee Chair may request
that members of management and representatives of the independent accountants
and internal auditing department be present at Committee meetings.
V. SPECIFIC DUTIES In carrying out its oversight
responsibilities, the Committee will: 1. Review and reassess
the adequacy of this Charter annually and recommend any proposed changes
to the Board for approval. This should be done in compliance with applicable
SEC and AMEX Audit Committee requirements. 2. Review, with the
Company’s management and independent accountants, the Company’s
accounting, financial reporting and internal controls. Obtain annually
in writing from the independent accountants, their letter as to the
adequacy of such controls. 3. Review, with the
Company’s management and independent accountants significant accounting
and reporting principles, practices, and procedures applied by the Company
in preparing its financial statements. Discuss with the independent
accountants their judgments about the appropriateness, quality and acceptability
of the Company’s accounting principles used in financial reporting. 4. Review the scope
and general extent of the independent accountants annual audit. The
Committee’s review should include an explanation from the independent
accountants of the factors considered by the accountants in determining
the audit scope, including the major risk factors. The independent accountants
should confirm to the Committee that no limitations have been placed
on the scope or nature of their audit procedures. The Committee will
review annually with management the fee arrangement with the independent
accountants. 5. Confirm and ensure
the independence and objectivity of the independent accountants and
obtain from the independent accountants, at least annually, a formal
written statement delineating all relationships and services and related
fees between the independent accountants and the Company as contemplated
by Independence Standards Board Standard No.1, Independence Discussions
with Audit Committees, in order to ensure that such independence and
objectivity are not impacted. 6. Have a predetermined
arrangement with the independent accountants that they will advise the
Committee, through its Chair and management of the Company, of any matters
identified through procedures followed for interim quarterly financial
statements, and that such notification as required under standards for
communication with audit committees is to be made prior to the related
press release or, if not practicable, prior to filing Forms I0-QSB.
Also receive a written confirmation provided by the independent accountants
at the end of the first three quarters of the year that they have nothing
to report to the Committee, if that is the case, or the written enumeration
of required reporting issues. 7. At the completion
of the annual audit, review with management and the independent accountants
the following:
8. After preparation
by management and review by independent accountants, approve the report
required under SEC rules to be included in the Company’s annual proxy
statement. 9. Discuss with the
independent accountants the quality of the Company’s financial and
accounting personnel. Also, elicit the continents of management regarding
the responsiveness of the independent accountants to the Company’s
needs. 10. Meet with management
and the independent accountants to discuss any relevant significant
recommendations that the independent accountants may have, particularly
those characterized as ‘material or ‘serious.’ Typically, such
recommendations will be presented by the independent accountants in
the form of a Letter of Comments and Recommendations to the Committee.
The Committee should review responses of management to the Letter of
Comments and Recommendations from the independent accountants and receive
follow-up reports on action taken concerning the aforementioned recommendations. 11. Recommend to the
Board the selection, retention or termination of the Company’s independent
accountants, to ensure, among other things, that the audit engagement
meets SEC and AMEX guidelines and is in accordance with generally accepted
auditing standards. 12. Approve all audit
and permitted non-audit services performed by the independent accountants
(including the fees and terms thereof), and implement policies and procedures
for approving such services. 13. Review and approve
the appointment, replacement, reassignment or dismissal of the director
of internal auditing. 14. Appoint, evaluate,
retain and, when necessary, terminate and replace the independent accountants. 15. Review with management
and the independent accountants the methods used to establish and monitor
the Company’s policies with respect to unethical or illegal activities
by Company employees that may have a material impact on the financial
statements. 16. Inquire of management and the independent accountants as to significant risks or exposures and assess the steps management has taken to minimize such risks to the Company. 17. Ensure compliance with the Company’s Code of Ethics for President
and Chief Financial Officer and Treasurer; report
any material violations thereof to the Board of Directors and recommend
to the Board appropriate action. Report to the Board of Directors at
least once each year regarding the general effectiveness of the Code
of Ethics. 18. Establish and
follow procedures for the receipt and handling of complaints received
from customers, shareholders, employees and other individuals regarding
the accounting, internal accounting control and auditing matters, in
the form attached hereto as Appendix A, as may be amended from time
to time. 19. Generally as part
of the review of the annual financial statements, receive an oral report,
at least annually, from the Company’s outside legal counsel concerning
legal and regulatory matters that may have a material impact on financial
statements. 20. As the Committee
may deem appropriate, obtain, weigh and consider expert advice to Audit
Committee related rules of the AMEX, SAS, and other accounting, legal
and regulatory provisions. 21. Review with the
independent accountants, the internal auditing department and management,
the extent to which changes or improvements in financial or accounting
practices, as approved by the Committee, have been implemented. (This
review should be conducted at an appropriate time subsequent to implementation
of changes or improvements, as decided by the Committee). 22. Perform any other
activities consistent with this Charter, the Company’s By-laws and
governing law, as the Committee or the Board may deem necessary or appropriate. As required by the Sarbanes
Oxley Act of 2002, employees of a corporation with publicly traded stock
must be able to voice concerns regarding the auditing or accounting
matters of the company. If an employee observes material irregularities
or misstatements in Gouverneur Bancorp, Inc. or its affiliate’s financial
accounting or auditing process, a confidential anonymous claim should
be filed with the Chairperson of the Audit Committee. A sealed
envelope addressed to the Chairperson of the Audit Committee may be
delivered to:
Chairperson, Audit Committee ~
Gouverneur Bancorp, Inc or the bank’s Internal
Audit Department or Compliance Officer. The sealed envelope will
be delivered, in tact, to the Chairperson, for evaluation. Employees must be aware
of complaints received from customers, shareholders and other individuals
regarding material accounting, internal accounting controls and auditing
matters of Gouverneur Bancorp and its affiliates. Complaints may
be received in person or in writing. It is important that a complaint
of this nature be immediately brought to the attention of the Chairperson
of the Director’s Audit Committee. Accept written concerns and
complaints and immediately forward to the Internal Audit Department
or Compliance Officer for delivery to the Chairperson. Verbal
complaints should be committed to writing either by the complainant
or the employee and delivered as previously instructed to the Chairperson
of the Audit Committee. Written resolution from
the Audit Committee will be sent to the individual voicing the concern
or complaint, provided that the communication was signed and a return
address indicated. Anonymous complaints
from employees will be handled in the same manner, however, no response
will be sent. Instead, a file will be maintained by the Internal
Audit Department for the purpose of documenting resolution to each complaint.
The file will be made available for employee review. |