AUDIT COMMITTEE RESPONSIBILITIES
2004 Committee Charter : GPT
The Audit Committee is a Committee of the Board of Directors of GreenPoint Financial Corp. (the "Company"). The Committee's role is to assist the Board in its oversight of the Company's financial reporting process, including monitoring: 1) the preparation, presentation and integrity of the financial statements of the Company, 2) the independence, performance and qualifications of the Company's independent auditor and internal auditors, and 3) the accounting and financial reporting principles and internal controls and procedures designed to assure compliance by the Company with accounting standards and applicable legal and regulatory requirements.
AUDIT COMMITTEE MEMBERSHIP REQUIREMENTS
The Board of Directors reviews existing and potential Audit Committee members on an annual basis to determine if they continue to meet the independence, experience and other applicable requirements for membership on the Committee. The Board reviews the composition of the Audit Committee for compliance with the composition requirements, each time a change in members occurs.
AUDIT COMMITTEE AUTHORITY
The Audit Committee is granted the authority to investigate any activity of the Company. It shall have the authority to retain independent legal, accounting or other consultants to advise the Committee. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor or any persons having special competencies to attend a meeting of the Committee, as necessary, to assist the Committee in fulfilling its responsibilities. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of: 1) compensation to the independent auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, 2) compensation to any advisors retained by the Audit Committee, and 3) ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.
MEETINGS AND AGENDA
The Audit Committee meets at least quarterly and as many times as the Committee deems necessary. Executive management, the internal auditor and a representative of the independent auditor attend the Committee meetings. Other members of management, as well as advisors, may be asked to attend, as deemed necessary. An agenda (previously reviewed by the Audit Committee Chair), along with pertinent materials (such as the internal auditor's quarterly report) to be discussed at the meeting, is sent to each Committee member prior to the meeting date.
The internal auditor, or a designated alternate, acts as Committee secretary and is responsible for preparing minutes of the meetings. The minutes are sent to all members of the Board of Directors and the Secretary of the Board, for permanent filing.
DUTIES OF THE AUDIT COMMITTEE
1. Review and reassess the adequacy of the Audit Committee Charter on an annual basis and recommend any proposed changes to the Board for approval.
2. Review the performance of the Audit Committee annually.
3. Discuss with Executive management and the independent auditor the audited annual financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K. Annual reports include the basis for management's report of the effectiveness of internal control over financial reporting and compliance with pertinent laws and regulations under Part 363 of the Federal Deposit Insurance Corporation's (FDIC) rules and regulations.
4. Meet periodically with management to review the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.
5. Review a summary of significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements.
6. Discuss with management and the independent auditor the review of the Company's quarterly financial statements, including disclosures made in management's discussion and analysis, prior to the release of the Form 10-Q. The Audit Committee may delegate authority to one or more members to engage in this discussion.
7. Discuss with management the Company's earnings press releases, as well as financial information and earnings guidance, if any, provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made).
8. Review and discuss reports from the independent auditor on (i) all critical accounting policies and practices to be used, (ii) all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor, and (iii) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.
9. Prepare the report required by the rules of the SEC to be included in the Company's annual proxy statement.
10. Have the sole authority to appoint or replace the independent auditor (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. The independent auditor shall report directly to the Audit Committee.
11. Review the experience and qualifications of the senior members of the independent auditor team.
12. Review and evaluate the lead audit partner.
13. Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law.
15. Preapprove all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, in accordance with Section 10A(i) of the Exchange Act and the Audit Committee's preapproval policies and procedures. The Audit Committee may delegate authority to one or more members to grant preapprovals of audit and permitted non-audit services, provided that decisions of such designee to grant preapprovals shall be presented to the full Audit Committee at its next scheduled meeting or, if, in the sole discretion of such designee, at an earlier special meeting of the Audit Committee scheduled by such designee for the purpose of making such presentation.
16. Review disclosures made to the Audit Committee by the Company's CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls over financial reporting or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company's internal controls over financial reporting.
17. Recommend to the Board policies for the Company's hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.
18. Review the appointment and, where appropriate, the replacement of the senior internal auditing executive.
19. Review, with Executive management and the internal auditor, the quarterly internal auditor's reports on controls, including management's response to the internal auditor's reported findings and recommendations and the resolution of identified weaknesses.
20. Review, with the independent auditor prior to the annual audit, the scope of its examination and discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 (as amended by SAS 90) relating to the conduct of the audit. Review with the independent auditor any problems or difficulties the auditor may have encountered and any management or other letter provided by the auditor and the Company's response to that letter. Such review should include (i) any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information and any significant disagreements with management, (ii) any changes required in the planned scope of the audit and (iii) coordination with the internal audit department.
21. Review, with management and the independent auditor, any correspondence with regulators or governmental agencies and published reports which raise material issues regarding the Company's financial statements or accounting policies.
22. Evaluate and discuss with the independent auditor any disclosures made by such independent auditor under Section 10A of the Private Securities Litigation Reform Act of 1995 (illegal acts).
23. Obtain reports from management, the Company's senior internal auditing executive and the independent auditor with respect to the Company's policies and procedures regarding compliance with applicable laws and regulations and the Company's Code of Business Conduct and Ethics.
24. Review, with Executive management and the independent auditor, their assessment of the adequacy of overall accounting and internal controls over financial reporting.
25. Fulfill, with Executive management, the requirements of Section 254 of the New York State Banking Law.
27. Review the scope of audits performed by the internal auditors and inform the Board of Directors regarding the approval of the internal auditor's Annual Audit Plan (Auditing Division Time Utilization Report).
28. Meet at least annually with the chief financial officer, the senior internal auditing executive and the independent auditor in separate executive sessions.
29. Report the results of each of the Audit Committee meetings to the Board of Directors at the next regularly scheduled Board meeting.
30. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
31. Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit 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 and applicable rules and regulations. These are the responsibilities of management and the independent auditor.