Finance, Risk Management & Audit Committee Charter

Purpose
The Finance, Risk Management and Audit Committee (the “Committee”) has been appointed by the Board of Directors (the “Board”) of Administaff, Inc. (the “Company”) to assist the Board in fulfilling its responsibility to oversee the financial affairs, risk management, accounting and financial reporting processes and audits of financial statements of the Company by reviewing and monitoring (i) the financial affairs of the Company, (ii) the integrity of the Company’s financial statements, (iii) the Company’s compliance with legal and regulatory requirements, (iv) the independent auditor’s (the “external auditors”) qualifications, independence and performance, (v) the performance of the personnel responsible for the Company’s internal audit function (the “internal auditors”) and the external auditors, and (vi) the Company’s policies and procedures with respect to risk management, as well as other matters which may come before it as directed by the Board. Pursuant to the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Securities and Exchange Commission (the “Commission”), the Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of the Company’s external auditors.

The Committee shall have and may exercise all the powers of the Board, except as may be prohibited by law, with respect to all matters encompassed by this Charter, and all the power and authority required under the Sarbanes-Oxley Act of 2002. The Committee shall prepare the report required by the rules of the Commission to be included in the Company’s annual proxy statement.

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 and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. The Board and the Committee recognize that the Company’s management is responsible for preparing the Company’s financial statements and the external auditors are responsible for auditing those financial statements. Therefore, the Board and the Committee’s responsibility is one of oversight.

Membership and Meetings
The Committee shall consist of the number of directors fixed from time to time by the Board, not less than three. The members of the Committee shall be appointed and may be removed by the Board in its discretion and upon the recommendation of the Nominating and Corporate Governance Committee. The Committee’s composition shall meet the independence and experience requirements of the New York Stock Exchange (“NYSE”), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Commission, in each case after giving effect to any applicable phase-in requirements. At least one member of the Committee shall be an “audit committee financial expert,” as defined by Item 401(h)(2) of Regulation S-K promulgated by the Commission.
The Committee shall meet as often as its members shall determine to be necessary, or as meetings may be called by the Chair of the Committee, any two members of the Committee or the Chairman of the Board, but in any event shall meet not less frequently than quarterly. In addition, the Committee will make itself available to the external and internal auditors of the Company as requested. The Committee shall meet separately, periodically, with the management, with the internal auditors and with the external auditors. The Committee may invite members of management, other employees of the Company, the Company’s outside counsel, the Company’s external auditor or others to attend meetings with, and furnish pertinent information to, the Committee. Committee shall also meet in executive session as required. The Board shall appoint one member of the Committee as Chair. The Chair of the Committee shall be responsible for scheduling all meetings of the Committee, determining the agenda for each meeting (following consultation with other members of the Committee and with management), presiding over meetings of the Committee and coordinating reporting to the Board. In the absence of the Chair, the majority of the members of the Committee present at a meeting shall appoint a member to preside at the meeting.

Authority and Responsibilities

The Committee is empowered to investigate any matter relating to the financial affairs and risk management of the Company brought to its attention, and shall have full access to all books, records, facilities and personnel of the Company. The Committee shall have the authority to retain and obtain advice and assistance from independent counsel, accounting and other advisors without seeking Board approval. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the external auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Committee.

The Committee has the sole responsibility and authority to select (subject to stockholder ratification), evaluate and, where appropriate, replace the Company’s external auditors. The Committee shall preapprove all audit, review or attest engagements and permissible non-audit services, including the fees and terms thereof, to be performed by the external auditors, subject to, and in compliance with, the de minimis exception for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act and the applicable rules and regulations of the Commission. The Committee shall be directly responsible for the compensation and oversight of the work of the external auditor (including resolution of disagreements between management and the external auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services. The external auditor shall report directly to the Committee.

The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services. The Committee also may delegate such preapproval authority to any of its members. Any decisions of such subcommittees or members to grant preapprovals shall be presented to the full Committee at its next scheduled meeting.

In addition to the foregoing, the Committee shall:

Oversight of the External Auditors
1. Review and discuss with the external auditor the planning and staffing of the annual audit and any other services provided by the Company’s external auditors, and approve the terms of and any fees related to the audit and such other services.

2. Review and evaluate the lead partner of the external auditors.

3. At least annually, obtain and review a report by the external auditors describing (i) the external auditors’ internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the external auditor, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, and (iii) all relationships between the external auditor and the Company as contemplated by Independence Standards Board Standard Number 1. Evaluate the external auditors’ qualifications, performance and independence, including considering whether the external auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the external auditor’s independence. In making this evaluation, the Committee shall take into account the opinions of management and the internal auditor. The Committee shall present its conclusions with respect to the external auditors to the full Board.

4. Assure the regular rotation of the audit partners as required by law. Consider, whether, in order to assure continuing auditor independence, there should be regular rotation of the audit firm itself.

5. Establish hiring policies for the Company’s employment of the external auditors’ employees or former employees.

Selection and Oversight of the Internal Auditors
6. Discuss and approve the appointment and replacement of the internal auditors.

7. Review and discuss with the internal auditors significant reports that the internal auditors prepare for management as well as management’s responses to those reports.

8. Discuss with management and the external auditors the responsibilities, budget, staffing and qualifications of the internal auditors and any recommended changes in the planned scope of the internal audit. The internal audit function (which may be outsourced to a third-party service provider other than the external auditor) is intended to provide management and the Committee with ongoing assessments of the Company’s risk management processes and system of internal control over financial reporting.

Financial Statements, Disclosure and Compliance Matters
9. Prior to the filing of the Company’s quarterly report on Form 10-Q and annual report on Form 10-K, review and discuss with the external auditors and management the annual audited financial statements and quarterly financial statements, as applicable, including disclosures made in management’s discussion and analysis of financial condition and results of operations, the results of any annual audit or interim financial review and any report or opinion rendered in connection therewith, as the case may be. Recommend to the Board whether the audited financial statements and accompanying notes should be included in the Company’s annual report on Form 10-K.

10. Prepare and approve the audit committee report as required by the Commission to be included in the Company’s proxy statement for the annual meeting (or in the Company’s annual report on Form 10-K if required to be included therein).

11. Review with the external auditors any communication or consultation between the audit team and the audit firm’s national office respecting auditing or accounting issues presented by the engagement.

12. Review and consider with the external auditors the matters required to be communicated by the external auditors pursuant to Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any problems or difficulties the external auditors encountered in the course of audit work and management’s response, any restrictions on the scope of the auditors’ activities or access to requested information, and any significant disagreements with management, whether satisfactorily resolved or not.

13. Review and discuss quarterly reports from the external auditors concerning (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 external auditors; and (iii) any material written communications between the external auditors and management such as any management letter provided by the external auditors and management’s response to that letter, any management representation letter, any reports on observations and recommendations on internal control over financial reporting, any schedules of unadjusted audit differences and a listing of adjustments and reclassifications not recorded, if any, and any engagement or independence letters.

14. Review the disclosures that the Company’s chief executive officer and chief financial officer make to the Committee and the external auditors in connection with the certification process for the Company’s Form 10-K and Form 10?Q concerning any significant deficiencies or weaknesses in the design or operation of internal control over financial reporting and any fraud that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

15. Review and discuss with management any earnings press releases, including the use of any “non-GAAP financial measure” as defined by the rules of the Commission, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally, covering, for example the types of information to be disclosed and the type of presentation to be made.
16. Review and discuss with management and the external auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements.

17. Meet periodically with management to review and discuss the Company’s major risk exposures and any steps management has taken to monitor and control such exposures, including the Company’s guidelines and policies concerning risk assessment and management.

18. Review and discuss with management and the external auditors (i) major issues regarding accounting principles and financial statement presentations, including significant changes in the selection or application of accounting principles, any major issues concerning the adequacy of the Company’s internal control over financial reporting and any special audit steps adopted in light of material control deficiencies; and (ii) analyses prepared by management and/or the external auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including analyses of the effects of alternative methods of generally accepted accounting principles on the financial statements.

19. Review proposed changes to the Company’s financial and accounting standards and principles and the Company’s policies and procedures with respect to its internal accounting, auditing and control over financial reporting.

20. Obtain assurance from the external auditors that Section 10A(b) of the Exchange Act has not been implicated.

21. Assist the Board in its oversight of the Company’s legal and regulatory compliance by advising the Board with respect to the Company’s policies and procedures concerning compliance with the Company’s Code of Business Conduct and Ethics. Obtain reports from management, the internal auditors and the external auditors addressing the Company’s and its subsidiaries’ compliance with the Company’s Code of Business Conduct and Ethics as well as applicable laws and regulations. Review reports and disclosures of insider and affiliated party transactions.

22. Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

23. Review and discuss with management, including the Company’s General Counsel, the internal auditor and the external auditors any legal matters that may have a material impact on the financial statements or the Company’s compliance policies and any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies.

24. Review and approve the services provided by independent accounting firms other than the external auditors.

25. Provide a report of Committee activities to the Board at regular intervals and review with the full Board any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s external auditors, or the performance of the internal auditors.

26. Perform such other functions as requested by the Board, or required by law or NYSE rule.

Annual Review of Charter and Performance

At least annually, the Committee shall review and reassess the adequacy of this Charter. The Committee shall report the results of the review to the Board and, if necessary, recommend that the Board amend this Charter. The Committee shall annually review its own performance.

As adopted by the Board of Directors on November 18, 2003.