Committee Evaluation Form MidwestISO Audit And Finance by Tqurg9

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									                      2010 AUDIT & FINANCE COMMITTEE SELF-EVALUATION

                                            BOARD OF DIRECTORS

               MIDWEST INDEPENDENT TRANSMISSION SYSTEM OPERATOR, INC.



In order to assess the performance of the Midwest ISO Board of Directors in carrying
out its responsibilities, the Audit & Finance Committee conducts an annual self-
evaluation process to review and assess its activities. This self-evaluation is intended
to enhance the Committee’s overall effectiveness, and solicits comments designed to
improve the functioning of the Committee.

Answers to the following questions should be based on the following ranking system:

1. = Strongly Disagree                          4. = Agree
2. = Disagree                                   5. = Strongly Agree
3. = Neither Agree nor Disagree



  A.           ORGANIZATION, ROLE AND                        Ratings                   Comments
               RESPONSIBILITY                                          (Please attach additional pages, if necessary)

               The Committee reviews its Charter
   1.          annually to determine whether its
                                                          1 2 3 4 5
               responsibilities are adequately
               described.

   2.          The Committee performs the functions
                                                          1 2 3 4 5
               set forth in its Charter.
   3.          The Committee encourages ethical
               behavior and integrity, and is
                                                          1 2 3 4 5
               committed to quality financial reporting
               and controls.
   4.          The Committee consists of an
               appropriate number of members
                                                          1 2 3 4 5
               having diverse and complementary
               backgrounds and experience.


Answers to the following questions should be based on the following ranking system:

1. = Strongly Disagree                          4. = Agree
2. = Disagree                                   5. = Strongly Agree
3. = Neither Agree nor Disagree




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                                                           Ratings                    Comments
                                                                      (Please attach additional pages, if necessary)

   5.          Members of the Committee have an
               appropriate level of financial expertise
                                                          1 2 3 4 5
               and experience with financial
               statements.
   6.          The Committee has a “financial
                                                          1 2 3 4 5
               expert” on the Committee.
   7.          The Committee has procedures to
               ascertain whether members continue         1 2 3 4 5
               to be independent.
   8.          The Committee requires the Audit
               Committee Chair to have leadership
               experience and a strong finance,           1 2 3 4 5
               accounting, and/or business
               background.
   9.          The Committee Chair directs the
               meetings, prioritizes topics, and
                                                          1 2 3 4 5
               determines that all important topics
               are addressed.
   10.         The Committee Chair meets with
               management prior to the meetings to
               review the agenda and the materials in     1 2 3 4 5
               preparation for Audit Committee
               meetings.
   11.         The Committee evaluates its
               performance on a regular basis and
                                                          1 2 3 4 5
               takes any necessary corrective
               actions.
   12.         The Committee develops a meeting
               schedule to make sure that the
                                                          1 2 3 4 5
               Committee meets the responsibilities
               outlined in its charter.
   13.         The Committee asks members of
               senior management with responsibility
               for key areas, such as Financial, IT,      1 2 3 4 5
               HR, and Legal, to report on issues at
               Committee meetings.




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Answers to the following questions should be based on the following ranking system:

1. = Strongly Disagree                           4. = Agree
2. = Disagree                                    5. = Strongly Agree
3. = Neither Agree nor Disagree


                                                              Ratings                   Comments
                                                                        (Please attach additional pages, if necessary)

   14.         The Committee prepares minutes for
               all meetings which are circulated in
                                                         1 2 3 4 5
               draft form to members prior to being
               finalized.
   15.         The Committee provides orientation
                                                         1 2 3 4 5
               training for new Committee members.
   16.         The Committee obtains continuing
               education on current accounting,
               auditing, and financial reporting         1 2 3 4 5
               developments, as well as current
               business and industry issues.
   17.         The Committee engages internal and
               external resources as necessary to        1 2 3 4 5
               carry out its duties.
  B.           FINANCIAL REPORTING

   1.          The Committee evaluates whether
               management exhibits and fosters a
               culture and environment that promotes
                                                         1 2 3 4 5
               high-quality financial reporting,
               including addressing internal control
               issues.
   2.          The Committee understands Midwest
                                                         1 2 3 4 5
               ISO’s financial results.
   3.          The Committee understands
               significant balance sheet and financial   1 2 3 4 5
               statement issues.
   4.          The Committee has an appropriate
               understanding of Midwest ISO’s            1 2 3 4 5
               regulatory accounting principles.
   5.          The Committee understands and
               monitors how management is
                                                         1 2 3 4 5
               assessing the adequacy and
               effectiveness of internal controls.




                                                          -3-
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Answers to the following questions should be based on the following ranking system:

1. = Strongly Disagree                          4. = Agree
2. = Disagree                                   5. = Strongly Agree
3. = Neither Agree nor Disagree


                                                             Ratings                   Comments
                                                                       (Please attach additional pages, if necessary)

   6.          The Committee understands the types
               of significant risks faced by Midwest
               ISO, including but not limited to cash
               flow; settlements; energy markets          1 2 3 4 5
               environment; significant business
               relationships; and regulatory
               requirements.
   7.          The Committee asks management
               and the auditors to identify complex
               and difficult areas affecting the          1 2 3 4 5
               Midwest ISO, and to explain fully their
               judgments relating to those matters.
   8.          The Committee asks management
               and the auditors how they assess the
               risk of material misstatements, what
                                                          1 2 3 4 5
               the significant risks facing the Midwest
               ISO are, and how they are responding
               to those risks.
   9.          The Committee asks detailed
               questions of management and the
               auditors when reviewing the financial
               statements, focusing on the adequacy
                                                          1 2 3 4 5
               of the Midwest ISO’s financial
               resources, the overall quality of
               financial reporting, and the
               transparency of disclosures.
   10.         The Committee understands why
               management did not correct audit
               differences that were identified and
               what the effect would be on the            1 2 3 4 5
               financial statements if those
               differences were corrected in the
               current period.
   11.         The Committee receives updates from
               management about reports received
                                                          1 2 3 4 5
               from regulators and their responses to
               those reports.




                                                          -4-
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Answers to the following questions should be based on the following ranking system:

1. = Strongly Disagree                          4. = Agree
2. = Disagree                                   5. = Strongly Agree
3. = Neither Agree nor Disagree


                                                             Ratings                   Comments
                                                                       (Please attach additional pages, if necessary)

   12.         The Committee receives timely
               updates from the General Counsel on
               legal and regulatory matters that may     1 2 3 4 5
               have a material effect on the financial
               statements.
   13.         The Committee assesses whether
               Midwest ISO has an appropriate
                                                         1 2 3 4 5
               business continuity plan and whether
               that plan has been tested.
   14.         The Committee understands how
               Midwest ISO publicizes and enforces
               written codes of conduct to help          1 2 3 4 5
               protect against fraudulent financial
               reporting.
  C.           AUDITING

   1.          The Committee has established
               processes for the appointment,
                                                         1 2 3 4 5
               compensation, and oversight of the
               independent auditors.
   2.          The Committee has direct access to
                                                         1 2 3 4 5
               the independent auditors.
   3.          The Committee reviews the planned
               scope of the work of the internal and
               independent auditors, results of their
               work, changes in the planned scope,
                                                         1 2 3 4 5
               the extent of control testing to be
               performed, and the extent and
               appropriateness of the coordination of
               their activities.
   4.          The Committee determines that the
               independent auditors are appropriately
               compensated to provide well-trained,
                                                         1 2 3 4 5
               highly experienced personnel required
               to perform the necessary procedures
               for a high-quality audit.




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Answers to the following questions should be based on the following ranking system:
1. = Strongly Disagree                          4. = Agree
2. = Disagree                                   5. = Strongly Agree
3. = Neither Agree nor Disagree

                                                             Ratings                   Comments
                                                                       (Please attach additional pages, if necessary)

   5.          The Committee inquires as to the
               results of the independent auditors’
               latest peer and internal reviews, as
                                                         1 2 3 4 5
               well as the status of significant
               litigation or regulatory actions by
               FERC and other agencies.
   6.          The Committee inquires of the
               auditors whether they have
               encountered any undue influence from      1 2 3 4 5
               management during the course of an
               audit.
   7.          The Committee inquires about the
               independent auditors’ quality control     1 2 3 4 5
               safeguards and independence.
   8.          The Committee reviews Internal
               Audit’s Charter and functional            1 2 3 4 5
               reporting responsibilities.
   9.          The Committee has established
               processes to review the appointment,
                                                         1 2 3 4 5
               replacement, reassignment, or
               dismissal of the Internal Auditor.
   10.         The Committee discusses with the
               internal and independent auditors
               whether they noted any instances of
                                                         1 2 3 4 5
               employee fraud, questionable or illegal
               payments, or violations of laws or
               regulations.
                                                             Ratings                   Comments
                                                                       (Please attach additional pages, if necessary)

  D.           EXPRESSION & COMMUNICATION

   1.          The Committee is provided with
               appropriate information necessary to      1 2 3 4 5
               prepare for Committee meetings.




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Answers to the following questions should be based on the following ranking system:
1. = Strongly Disagree                            4. = Agree
2. = Disagree                                     5. = Strongly Agree
3. = Neither Agree nor Disagree


                                                               Ratings                   Comments
                                                                         (Please attach additional pages, if necessary)

   2.          Materials distributed prior to
               Committee meetings sufficiently inform
               Directors of agenda items so meeting
                                                          1 2 3 4 5
               time may be conserved and devoted
               to discussion and questions from
               Directors.
   3.          Committee meeting formats and
               presentations are interesting and          1 2 3 4 5
               useful.
   4.          The Committee encourages and
               ensures open lines of communication
                                                          1 2 3 4 5
               between Committee members and
               management.
   5.          Committee discussions are stimulating
               and encourage the free exchange of         1 2 3 4 5
               ideas.
   6.          The Committee has a process in place
               to receive and respond to any reports
                                                          1 2 3 4 5
               of fraud, theft or other financial
               irregularities.
   7.          There is sufficient time at each
               meeting for the scheduled                  1 2 3 4 5
               presentations to the Committee.
   8.          There is full discussion of the subjects
                                                          1 2 3 4 5
               presented.
   9.          Committee requests for information
                                                          1 2 3 4 5
               are reasonable.
   10.         The Committee’s requests are met
                                                          1 2 3 4 5
               with thorough and prompt responses.
   11.         The Committee meets privately with
               management, the Internal Auditor, and
                                                          1 2 3 4 5
               the Independent Auditors at least
               annually.
   12.         The Committee meets in Executive
               Session as necessary and appropriate       1 2 3 4 5
               to fulfill its responsibilities.




                                                           -7-
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Answers to the following questions should be based on the following ranking system:
1. = Strongly Disagree                             4. = Agree
2. = Disagree                                      5. = Strongly Agree
3. = Neither Agree nor Disagree


                                                                Ratings                   Comments
                                                                          (Please attach additional pages, if necessary)

   13.         The Committee meets frequently
                                                           1 2 3 4 5
               enough to fulfill its responsibilities.
   14.         The Committee makes regular reports
                                                           1 2 3 4 5
               to the Board of Directors.




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               OPEN-ENDED QUESTIONS
   1.          Please state any additional concerns that you have regarding your committee or the performance
               of other Board members on your committee.




               EVALUATION CRITIQUE
   2.          Does the five-point scale provide an adequate measure of your opinion? If not, do you prefer an
               alternative?




   3.          Are there additional questions or issues that should be included in future evaluations? If yes,
               please advise.




   4.          Are there questions on the evaluation that you think are unnecessary? If yes, please advise.




   5.          Does this evaluation process help you assess ways that will improve your performance?




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