§ 2116-c. Audit committees. 1. Every school district, except those
employing fewer than eight teachers, shall establish by a resolution of
the trustees or board of education an audit committee to oversee and
report to the trustees or board on the annual audit of the district
records as required by section twenty-one hundred sixteen-a of this
article.

2. The audit committee shall be established no later than January
first, two thousand six as a committee of the trustees or board, as an
advisory committee, or as a committee of the whole. An advisory
committee may include, or be composed entirely of persons other than
trustees or members of the board if, in the opinion of the trustees or
board, such membership is advisable to provide accounting and auditing
expertise.

3. The audit committee shall consist of at least three members, who
shall serve without compensation. Committee members shall be reimbursed
for any actual and necessary expenditures incurred in relation to
attendance at meetings. Employees of the school district are prohibited
from serving on the audit committee. A member of an audit committee
shall be deemed a school district officer for the purposes of sections
thirty-eight hundred eleven through thirty-eight hundred thirteen of
this chapter, but shall not be required to be a resident of the school
district.

4. The role of an audit committee shall be advisory and any
recommendations it provides to the trustees or board under subdivisions
five and six of this section shall not substitute for any required
review and acceptance by the trustees or board of education. If required
by a regulation adopted by the commissioner, the annual audit report
prepared by an independent certified public accountant or an independent
public accountant shall not be deemed final until accepted by a
resolution adopted by the trustees or board of education.

5. It shall be the responsibility of the audit committee to:

(a) provide recommendations regarding the appointment of the external
auditor for the district;

(b) meet with the external auditor prior to commencement of the audit;

(c) review and discuss with the external auditor any risk assessment
of the district's fiscal operations developed as part of the auditor's
responsibilities under governmental auditing standards for a financial
statement audit and federal single audit standards if applicable;

(d) receive and review the draft annual audit report and accompanying
draft management letter and, working directly with the external auditor,
assist the trustees or board of education in interpreting such
documents;

(e) make a recommendation to the trustees or board of education on
accepting the annual audit report; and

(f) review every corrective action plan to be developed by a school
district as required by section twenty-one hundred sixteen-a of this
article and assist the trustees or board of education in the
implementation of such plan.

6. In addition, it shall be the responsibility of the audit committee
to assist in the oversight of the internal audit function required by
section twenty-one hundred sixteen-b of this article, including, but not
limited to, providing recommendations regarding the appointment of the
internal auditor for the school district, the review of significant
findings and recommendations of the internal auditor, monitoring of the
school district's implementation of such recommendations, and the
evaluation of the performance of the internal audit function.

7. Notwithstanding any provision of article seven of the public
officers law or any other law to the contrary, a school district audit
committee may conduct an executive session pursuant to section one
hundred five of the public officers law pertaining to any matter set
forth in paragraphs b, c, and d of subdivision five of this section. Any
trustee or member of the board of education who is not a member of such
audit committee may be allowed to attend an audit committee meeting if
authorized by a resolution of the trustees or board of education.

8. The commissioner is authorized to promulgate regulations with
respect to audit committees as is necessary for the proper performance
of their duties.

9. As long as the chancellor of a school district in a city having a
population of one million or more inhabitants shall annually certify to
the commissioner that such district has a process for review by an audit
committee of the district's annual audit that meets or exceeds the
requirements of this section, the provisions of this section shall not
apply to such school district.