[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR630.6]



[Page 292-293]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 630_DISCLOSURE TO INVESTORS IN SYSTEMWIDE AND CONSOLIDATED BANK 

DEBT OBLIGATIONS OF THE FARM CREDIT SYSTEM--Table of Contents

 

                            Subpart A_General

 

Sec. 630.6  Farm Credit System audit committee and bank audit committees.



    (a) Farm Credit System audit committee. (1) The board of the Funding 

Corporation shall establish and maintain a System Audit Committee and 

adopt a written charter describing the committee's composition, 

authorities, and responsibilities.

    (2) The System Audit Committee shall consist of no fewer than three 

members. Members shall be independent of management of any disclosure 

entity and association and free from any relationship that, in the 

opinion of the board of directors of the Funding Corporation, would 

interfere with the exercise of independent judgment as a committee 

member. Members shall be knowledgeable in public and corporate finance, 

and financial reporting and disclosure.

    (3) The System Audit Committee shall report to the board of the 

Funding Corporation and shall be given adequate resources and 

authorities to discharge its responsibilities, including



[[Page 293]]



the ability to consult the Funding Corporation's legal counsel.

    (4) Responsibilities. At a minimum, the System Audit Committee 

shall:

    (i) Make recommendations to the board of the Funding Corporation 

regarding the selection of an independent auditor of the Systemwide 

combined financial statements;

    (ii) Oversee the Funding Corporation management's preparation of the 

report to investors;

    (iii) Review the impact of any significant accounting and auditing 

developments, and review accounting policy changes relating to 

preparation of the Systemwide combined financial statements;

    (iv) Review the System's annual and quarterly reports to investors 

prior to their release; and

    (v) Oversee the Funding Corporation's system of internal controls 

relating to preparation of the report, including controls relating to 

the System's compliance with applicable laws and regulations.

    (b) Farm Credit System bank audit committees. (1) Each System bank 

shall establish and maintain a bank audit committee that shall report to 

the board of the bank.

    (2) The bank audit committee shall consist of no fewer than three 

members. Members shall be independent of management and free from any 

relationship that, in the opinion of the board of directors of the bank, 

would interfere with the exercise of independent judgment as a committee 

member. Members shall be knowledgeable in public and corporate finance, 

and financial reporting and disclosure.

    (3) Responsibilities. At a minimum, the bank audit committee shall:

    (i) Review the bank's financial statements and significant 

accounting policies;

    (ii) Oversee the bank's financial reporting regarding its disclosure 

to shareholders and to the Funding Corporation for disclosure to 

investors;

    (iii) Oversee the audit activities of the external auditor; and

    (iv) Monitor internal controls, including those relating to 

compliance with laws and regulations.