The Audit and Finance Committee assists the Board of Governors in fulfilling its fiduciary responsibilities. The Chairman of the Board selects the members of the Committee. This year the Committee, whose current members include Governors Mickey D. Barnett, Louis J. Giuliano, Thurgood Marshall, Jr., and me, met eight times. The Committee wishes to extend its appreciation to former Governor Katherine Tobin for her service and leadership as Chairman through August 2009, when she resigned to accept a new appointment at the U.S. Department of Education. I joined the Committee to serve as Chairman upon Katherine’s resignation.
The Committee’s primary responsibility is oversight of the integrity of the Postal Service’s financial statements and the soundness of its internal accounting and control practices. The certified public accounting firm responsible for the independent audit of Postal Service financial statements, Ernst & Young LLP, reports to the Board through the Committee. The Postal Inspector General, who reports to the Governors, is represented at all Committee meetings.
During this fiscal year, the Committee focused on:
The Committee closely reviewed forecasts and cash flow projections at each meeting and advised the full Board as to its conclusions.
Building on efforts that have been underway since 2007, preparation for SOX compliance featured prominently in the Committee’s work during fiscal year 2009. The Committee received regular briefings on SOX requirements and progress toward certification in 2010. The Committee provided oversight on the strategic direction and guidance on decisions related to readiness, process improvement opportunities and ongoing compliance initiatives.
The Committee this year began to receive regular updates on cyber security issues. As information technology security is integral to Postal Service systems and the protection of customer, employee and business data, the Committee will continue to monitor developments in the cyber security field as they relate to Postal Service operations.
Finally, as part of its commitment to increased transparency and accountability, the Postal Service completed its second full fiscal year in compliance with SEC reporting rules. The Committee was pleased with the quality of disclosures in required financial filings each quarter. Management is to be commended on a successful transition to this new regulatory framework.
In directing the conduct of the 2009 financial statement audit, the Committee met with Ernst & Young LLP, and approved the scope and materiality levels they established in their work plan. The Committee met jointly and independently with Chief Financial Officer Corbett and his staff; Ernst & Young LLP; Inspector General Williams; and General Counsel Gibbons throughout the year to discuss the progress of the audit and to ensure independence and objectivity in all audit programs.
As a result, the Committee recommended, and the Board approved, the financial statements for 2009.
The Committee received regular briefings on SOX requirements and progress toward certification in 2010. The Committee provided oversight on the strategic direction and guidance on decisions related to readiness, process improvement opportunities and ongoing compliance initiatives.
