MINUTES OF THE REGULAR MEETING

OF THE

AUDIT COMMITTEE

 

March 21, 2013

 

 

Table of Contents

 

                Subject                                                                                                                                  Page No.               Exhibit

 

Introduction                                                                                                                                    2

1.                   Adoption of the March 21, 2013 Proposed Meeting Agenda                                            3

2.                   Consent Agenda:                                                                                                                       4

a.       Approval of the Minutes of the Regular Meeting held                                        5                                                      

    on September 24, 2012

 

b.       2013 Internal Audit Plan                                                                                          6                       “2b-A” – “2b-C” 

Discussion Agenda:                                                                                                                                   8

 

3.                   Year-end 2012 Financial Report                                                                                             8                       “3-A”

Resolution

 

4.                   Summary of 2012 Annual Audit of Financial Statements                                               10                      “4-A”

5.                   Risk Management Update                                                                                                      11                      “5-A”

a.       Corporate Policy – Risk Management and Executive                                           12                      “5a-A” – “5a-C”

    Risk Management Committee Charter

 

6.                   Internal Audit Activity Report                                                                                                14                      “6-A” – “6-C”

7.                   Non-Audit Services: Authorization to Engage KPMG to Perform                                   16

    Agreed-Upon Procedures Relating to Seaway Private Equity

    Corporation and Notification of Additional Funding for the

    Contract with KPMG 

Resolution

 

8.                   Motion to Conduct an Executive Session                                                                            18

9.                   Motion to Resume Meeting in Open Session                                                                       19

10.                Next Meeting                                                                                                                             20

11.                Closing                                                                                                                                        21

 

                                                                                                                                                                                               


Minutes of the regular meeting of the New York Power Authority’s Audit Committee held at the Authority’s offices at 123 Main Street, White Plains, New York at approximately 9:30 a.m.

 

                The following Members of the Audit Committee were present:

 

Trustee Terrance P. Flynn, Chairperson

Trustee R. Wayne LeChase

 

 

Trustee Eugene L. Nicandri, Excused

 

 

Also in attendance were:

 

                John Koelmel                                       Chairman, New York Power Authority          

                Gil Quiniones                                        President and Chief Executive Officer

                Edward Welz                                        Chief Operating Officer

                Judith McCarthy                                 Executive Vice President and General Counsel

                Donald Russak                                    Executive Vice President and Chief Financial Officer

                William Nadeau                                   Senior Vice President and Chief Risk Officer

                Karen Delince                                       Corporate Secretary

                Thomas Concadoro                            Vice President and Controller

                Dennis Eccleston                                 Vice President – Information Technology/Chief Information Officer    

                Lesly Pardo                                           Vice President – Internal Audit

                Frank Deaton                                       Director – Enterprise Risk Management

                Gary Schmid                                        Manager – Network Services           

                Lorna Johnson                                     Associate Corporate Secretary

                Sheila Baughman                                                Assistant Corporate Secretary

                Kenneth Deon                                      Engagement Partner, KPMG

                Scott Heiser                                          Senior Manager, KPMG    

 

 

Chairman Terrance P. Flynn presided over the meeting.  Corporate Secretary Delince kept the Minutes.


Introduction

 

Chairman Terrance Flynn welcomed committee member Trustee LeChase, the Authority’s Chairman and senior staff to the meeting.  He said the meeting had been duly noticed as required by the Open Meetings Law and called the meeting to order pursuant to section B(4) of the Audit Committee Charter.

 

 


1.                   Adoption of the Proposed Meeting Agenda

 

By motion made and seconded the agenda for the meeting was adopted.

 

 


2.                   Consent Agenda:

 

Upon motion made and seconded the Consent Agenda was approved.

 

 


a.       Approval of the Minutes 

 

                Upon motion made and seconded, the Minutes of the Committee’s Regular Meeting of September 24, 2012 were approved.

 

 


b.                   2013 Internal Audit Plan

The Vice President of Internal Audit submitted the following report:

SUMMARY

 

“The Internal Audit Plan summarizes the audits and projects that Internal Audit anticipates performing during 2013.  The 2013 Internal Audit Plan was developed through a formal risk assessment process and taking into account NYPA’s Strategic Plan.

 

BACKGROUND

 

“The Internal Audit Department is an independent, objective and consulting function designed to add value by improving the Authority’s internal control structure and operations.  It helps the organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate, test and improve the effectiveness of internal controls, risk management and governance processes.

 

“The Audit Committee Charter states that the Committee shall provide oversight of the Office of Internal Audit (“OIA”) and the OIA’s resources and activities to facilitate the OIA’s improvement of internal controls.  In addition, the Committee shall meet at least three times a year with the head of the OIA for the purpose of reviewing audit activities, audit findings, management’s responses, remedial action plans, and providing the OIA with an opportunity to discuss items and topics of relevance to the Audit Committee.

 

DISCUSSION

 

                Highlights of the 2013 Internal Audit Plan

 

·         The 2013 Internal Audit Plan is based on the results of a formal risk assessment process and management input.

 

·         The risk assessment process considered various risk factors such as:  financial impact, reputational risk, complexity, size, changes in operations/systems and internal controls.  Exhibit “2b-A” summarizes the risk assessment process.

 

·         NYPA’s Strategic Plan and operating/capital budgets were reviewed and meetings were conducted with business owners to help ensure all potential risk areas were identified.

 

·         Focus on the high risk areas identified by the risk assessment process.  Forty-one (41) audits are scheduled, including 31 financial/operational and 10 information technology audits, covering all Business Units.  The 2013 Internal Audit Plan is shown on Exhibit “2b-B.”

 

·         Ten (10) financial/operational and/or information technology audits will be conducted at the facilities.

 

·         Key audits scheduled include Emergency Management, Energy Hedging, Energy Efficiency Program, Safety Program, Recharge New York Program Management, NERC Compliance, Lewiston Pump Generation Plant Life Extension and Modernization, Fuels Operations, and operational audits at Niagara and Southeast New York (“SENY”).

 

·         Other audit activities include assistance to KPMG in its audit of NYPA’s Financial Statements, work on Economic Development Job Commitment audits, vendor contract audits and the usual support to the Ethics office.

 

·         The 2013 Internal Audit Plan will provide comprehensive audit coverage, deploying Internal Audit resources in an effective and efficient manner.

 

·         The Internal Audit Plan was prepared based on current staffing levels.  Internal Audit includes ten professional auditors and an executive administrative staff.

 

·         The Audit staff holds professional certifications such as Certified Public Accountant, Certified Internal Auditor and Certified Information Systems Auditor, and some have earned advanced educational degrees.  Exhibit “2b-C” provides the organizational structure of Internal Audit along with staff’s educational and experience information.

 

·         Performance Goals

- Completion of the Internal Audit Plan – goal ≥ 90%.

- Completion of high risk audit areas – goal of 100%.

 

·         Internal Audit will participate in an external quality assurance review as required by the International Standards for the Professional Practice of Internal Auditing (IIA Standards) once every five years.  The objective of the review is to determine whether Internal Audit is in compliance with IIA Standards and to identify improvement opportunities.”

 

 

 

 


DISCUSSION AGENDA:

 

3.                   Year-end 2012 Financial Report

 

The Vice President and Controller submitted the following report:

 

SUMMARY AND DISCUSSION

 

“Pursuant to Section 2800 of the Public Authorities Law, as amended by the Public Authorities Accountability Act of 2005 (‘PAAA’), the Authority is required to file its  financial report for the year ended December 31, 2012 and submit this report to the Governor, legislative leaders, the State Comptroller and the Authorities Budget Office (Exhibit ‘3-A’).  The PAAA reflects the State’s commitment to maintaining public confidence in public authorities by ensuring that the essential governance principles of accountability, transparency and integrity are followed at all times.

 

“This year-end 2012 financial report includes financial statements that present the financial position and results of operations of the Authority as of December 31, 2012 under generally accepted accounting principles.  The report is prepared by staff and the financial statements are audited by independent accountants from KPMG LLP.  As required by the PAAA, the financial reports have been certified by the Authority’s Chief Executive Officer and Chief Financial Officer.  After the Audit Committee’s review, the 2012 financial report is scheduled to be presented for approval by the Authority’s Trustees at their meeting later today.  Changes of particular significance have been highlighted in the attached draft to facilitate the Audit Committee’s review.

 

RECOMMENDATION

 

“It is requested that the Audit Committee recommend that the Authority’s Trustees approve the financial statements for the year ended December 31, 2012.”

 

                Mr. Thomas Concadoro presented highlights of the financial statements to the Committee.  He said that net income for the year 2012 was $175 million, which was $60 million lower than 2011 primarily due to higher State Contributions and lower investment income.  He also said that the variances in depreciation, interest expense and operations and maintenance expenses were primarily attributable to operations of the Astoria Energy II generating station and residential consumer discounts associated with the Recharge New York Power Program.  Mr. Concadoro indicated that, for the reporting period, current assets increased and this was due primarily to the positive results of operations.

                In response to a question from Authority Chairman, John Koelmel concerning the Other Post-Employment Benefits Trust, Mr. Concadoro said the Authority uses a discount rate of seven percent for Post-Employment health benefits and that government entities recognize this obligation differently than commercial entities.  Mr. Ken Deon added that it is normal for government entities to have a higher discount rate because government entities are required to utilize projected earnings rates for this purpose which differs from requirements for commercial entities.  He said the KPMG actuarial group examined the assumptions for the use of this rate and they are satisfied with it.

Responding to a question from Trustee Flynn, Ms. Judith McCarthy said the Authority is in litigation with the St. Regis tribe regarding land claims.  She has had discussion with Mr. Concadoro regarding the reversal of the related accrued liability and is in agreement with the decision to make this change.  She said that she would discuss this issue further during the executive session.

The following resolution, as submitted by the Vice President and Controller, was unanimously approved.

 

WHEREAS, The Executive Vice President and Chief Financial Officer and Vice President and Controller have prepared, reviewed and submitted for consideration of the Audit Committee the attached financial statements for the year ending 2012; and

 

WHEREAS, The Audit Committee has itself reviewed the attached financial statements;

 

NOW THEREFORE BE IT RESOLVED, That the Audit Committee recommend that the Authority’s Trustees approve the financial statements for the year ended December 31, 2012.

 

 

 

 

 


4.                   Summary of 2012 Annual Audit of Financial Statements

 

Mr. Ken Deon, KPMG’s Audit Engagement Partner, presented an overview of the Authority’s 2012 Annual Audit of Financial Statements (Exhibit “4-A”).  He introduced Mr. Scott Heiser, the Senior Manager on the Audit.  Mr. Deon said, despite the tight deadline, the audit for 2012 went smoothly and the auditors received full cooperation from the Authority’s management throughout the process.  He outlined the responsibilities of the Authority’s management and Audit Committee as well as KPMG’s.  He said during the audit they did not identify any material weaknesses or significant deficiencies in the internal controls related to financial reporting and he found that the Authority’s management has strong controls over its financial reporting.  He ended by stating that KPMG will issue an unqualified opinion on the financial statements.

Mr. Scott Heiser highlighted the key accounting policies and procedures which the audit focused on for the year 2012.  He outlined some of the entity-wide controls, audit risks and issues.  He said, overall, the audit went well, the Authority’s controls are strong and the auditors received full cooperation from management during the audit.  He ended by stating that KPMG will issue a SAS 114 letter with required communications to the audit committee.

                Responding to a question from Trustee LeChase, Mr. Deon said that for public companies, there is a 5-year rotation policy for audit partners.  Mr. Concadoro said the Authority goes out for bid once every 5 years on the audit contract and is scheduled to go out for bid after the 2013 audit is completed.  Responding to a further question from Trustee LeChase, Mr. Deon said the audit included Information Technology processes.  Mr. Heiser added that KPMG tested the Authority’s IT applications related to financial reporting and found no significant issues.  In response to a question from Chairman Koelmel, Mr. Deon said, the auditors would ensure that future projects which would potentially involve significant investments by the Authority, such as those associated with the Energy Highway initiative, are appropriately recorded in the financial statements.


5.                   Risk Management Update

The Senior Vice President and Chief Risk Officer submitted the following report:

 

SUMMARY

                “This memorandum provides an update to the Audit Committee on the Authority’s risk management activities. 

BACKGROUND

                “In accordance with the Audit Committee Charter (‘Charter’), the Chief Risk Officer is required to provide an update on the Authority’s risk management activities.  The Charter indicates that the Audit Committee will provide guidance to the Authority’s Chief Risk Officer on critical business objectives, risks and philosophy and tolerance for risk mitigation.  Through regular Chief Risk Officer informational updates, the Audit Committee will be informed of the Authority’s risk management activities to assist in meeting their Charter objectives.

DISCUSSION

                “The Chief Risk Officer last provided an update at the Audit Committee’s meeting on September 24, 2012.  The PowerPoint presentation (Exhibit ‘5-A’) represents activities since that time to be reviewed with the Audit Committee at the March 21, 2013 meeting.”

 

                Mr. William Nadeau provided an update on the Authority’s risk management activities to the Committee.   Responding to a question from Chairman Flynn and Trustee LeChase, President Quiniones said staff plans to set up a “real-time dashboard” prioritizing the risks as identified by staff so that the Trustees can have immediate access to this information and be able to seek clarification on any topic at each Audit committee meeting.   Mr. Nadeau said, based on the comments from the Trustees, he will enhance the next report focusing on the key risk areas and actions that will be taken regarding the Authority’s aging infrastructure.

 


a.       Corporate Policy – Risk Management and Executive

        Risk Management Committee Charter                           

                The Director of Energy Risk Management submitted the following report:

SUMMARY

 

“The Audit Committee of the Board of Trustees (the ‘Audit Committee’) is requested to review and recommend approval by the Trustees of the Corporate Policy – Risk Management (the ‘Policy’) and the Executive Risk Management Committee Charter (the ‘Charter’), which are attached hereto as Exhibits ‘5a-A’ and ‘5a-B.’ Together, the Policy and Charter will supersede the Governing Policy for Energy Risk Management (the ‘Governing Policy’), which was last approved by the Trustees at their meeting of January 31, 2012, and is attached hereto as Exhibit ‘5a-C.’

 

“The proposed Policy and Charter document the philosophy, framework and delegation of authority for the Authority's risk management activities, including those related to energy commodity and credit risk.  The previously approved Governing Policy focused on energy commodity and credit risk management.  The proposed Policy and Charter expand and improve the governance structure and controls in the Governing Policy.  They align with the Authority’s corporate governance structure and establish accountabilities more broadly for all Authority risk management activities.  Previously established controls, including the delegation of authority to the Executive Risk Management Committee (the ‘ERMC’) for energy commodity transactions and credit risk management and the posting of any necessary collateral in support of such transactions, remain unchanged. 

 

“The members of the ERMC and the Executive Management Committee reviewed the proposed Policy and Charter and recommend their approval to supersede the Governing Policy.   

BACKGROUND

 

“At their meeting of September 28, 2010, the Trustees approved the Governing Policy.  Subsequently, on January 31, 2012, the Trustees approved modifications to the Governing Policy to clarify transaction types and authorities.  The Governing Policy outlines the philosophy, framework and delegation of authority for the Authority’s program for energy commodity and credit risk management.  The Governing Policy also provides the necessary authority to an appointed ERMC to oversee program implementation, including the authority to enter into forward hedging transactions and to post any necessary collateral in support of such transactions.  

 

“In addition, at their meeting of May 19, 2009, the Trustees approved the adoption of an Enterprise Risk Management Program (the ‘Program’).  At that time, it was acknowledged that risk management is a coordinated approach to identifying, assessing and managing risks across the enterprise.  The development of the proposed Policy and Charter are important to mature the Authority’s enterprise risk management activities. 

DISCUSSION

 

“The Policy and Charter are designed to broaden the Authority’s governance materials to appropriately reflect the enterprise’s view of risk management as adopted by the Trustees at their May 19, 2009 meeting.  In this regard, the ERMC’s current role of overseeing the Authority’s risk management activities related to energy commodity and credit risk will expand to incorporate all enterprise risks.  In addition, the Policy and Charter aligns risk management governance materials with existing Authority governance documents including the Board of Trustees Charter of the Audit Committee.  The core philosophy and framework for risk management outlined within the Policy and Charter are consistent with the Program approved at the May 19, 2009 meeting, as well as the predecessor Governing Policy approved at the January 31, 2012 meeting.  The Audit Committee will be asked annually to review and recommend approval by the Trustees of the Policy and Charter.

 

  

RECOMMENDATION

 

                “The Senior Vice President – Chief Risk Officer recommends that the Audit Committee review and recommend approval by the Trustees of the Corporate Policy – Risk Management and the Executive Risk Management Committee Charter as reflected in Exhibits ‘5a-A’ and ‘5a-B’ and discussed above.”

 

                Mr. Frank Deaton provided highlights of the report to the Committee.

 

                Upon motion made and seconded, the Corporate Policy – Risk Management and Executive Risk Management Committee Charter were unanimously approved.

 

                                                                                                               

 

 


6.                   Internal Audit Activity Report – December 31, 2012

 

The Vice President of Internal Audit submitted the following report:

 

SUMMARY

 

“The Internal Audit Activity Report covers the performance of the Internal Audit Department for the period of January 1 through December 31, 2012.  The report provides the status of the 2012 Audit Plan as of December 31, 2012, including a summary of completed audits, audits in progress, and reports issued since the last Audit Committee meeting in September.

 

BACKGROUND

 

“The Internal Audit Department is an independent, objective and consulting function designed to add value by improving the Authority’s internal control structure and operations.  It helps the organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate, test and improve the effectiveness of internal controls, risk management and governance processes.

 

“The Audit Committee Charter states that the Committee is to provide direct oversight of the internal audit function and shall meet at least three times a year with the head of the Office of Internal Audit (‘OIA’) for the purpose of reviewing audit activities, audit findings, management’s responses, remedial action plans, and providing the OIA with an opportunity to discuss items and topics of relevance to the Audit Committee.

 

“The purpose of this report is to provide the Audit Committee the status of the 2012 Internal Audit Plan, which was reviewed by the Committee at its meeting in March.

 

DISCUSSION

 

1.       Highlights as of December 31, 2012

 

“During 2012, Internal Audit accomplished the following:

 

·         Completed 38 audits and one special project including 29 financial/operational and nine (9) information technology audits.

 

·         One audit was in progress.

 

·         Nine-five (95) percent of the Plan was completed, exceeding staff’s performance target of 90%.

 

·         Issued 36 audit reports containing 81 recommendations to improve internal controls/operational efficiency.

 

·         All issues and recommendations are being appropriately addressed by management and have either been implemented or are scheduled for implementation.

 

·         No restrictions have been placed on Internal Audit’s work.  Full cooperation is being received at all levels.

 

·         There are no matters that need the Committee’s attention.

 

2.       Audits Completed/In-Progress

 

A.      Exhibit ‘6-A’ provides the Audit Plan status as of December 31, 2012.  Exhibit ‘6-B’ lists all audits in the 2012 Audit Plan and their current status.  As of December 31, 2012, approximately 95% of the audits in the Audit Plan have been completed, exceeding staff’s performance target of 90% for completion of the Audit Plan.  The following reports were issued since the last Audit Committee Meeting in September:

                                                                                                                                                 

Report Title                                                                                                                             Report Date

Astoria Energy II Project Agreement                                                                                     08/31/12

Counterparty Credit                                                                                                                  09/20/12

CEC Purchasing/Warehousing                                                                                                09/30/12

Public Authorities Laws                                                                                                            10/17/12

NYISO Transmission Settlements                                                                                          10/26/12

SAP-FI General Ledger                                                                                                             10/31/12

Licensing Operations                                                                                                                10/31/12

Public & Governmental Affairs Expenditures                                                                     11/28/12

Small Clean Power Plants O&M                                                                                             11/30/12

Energy Management System                                                                                                  12/15/12

SAP Billing System (Recharge NY)                                                                                        12/21/12

NYISO Installed Capacity                                                                                                       12/31/12

Niagara SCADA System                                                                                                          12/31/12

Energy Efficiency Programs                                                                                                    12/31/12

Recharge NY Program Management                                                                                    12/31/12

Configuration Management Program                                                                                   12/31/12

 

Exhibit ‘6-C’ provides a summary of audit reports issued, including audit objectives and findings and/or recommendations.

 

B.      Audit in Progress:  Salary Administration

 

3.       Audit Plan Changes

Added:

SAP Billing System (Recharge NY)

Transmission Consulting Project

Postponed:

Electronic Record Management System

SAP Business Planning Consolidation”

 


7.                   Non- Audit Services: Authorization to Engage KPMG to

Perform Agreed-Upon Procedures Relating to Seaway

Private Equity Corporation and Notification of

Additional Funding for the Contract with KPMG                

 

                The Vice President and Controller submitted the following report:

 

SUMMARY

 

“This memorandum requests the Audit Committee’s approval to engage KPMG LLP (‘KPMG’) to perform agreed-upon procedures relating to Seaway Private Equity Corporation’s (‘SPEC’) investment activities and notifies the Audit Committee of additional funding for the Authority’s contract with KPMG LLP that was recently approved by the Executive Vice President and Chief Financial Officer.

 

BACKGROUND

 

“The Authority’s contract with KPMG (2009 thru 2013) for accounting services was awarded for $1.6 million and was approved by the Trustees at their meeting on July 28, 2009.

 

“In 2006, with the Trustees’ prior approval, the Authority entered into an agreement with SPEC that enabled the Authority to provide up to $10 million of grant funds to SPEC.  Under the agreement, SPEC is required to use the funds to make investments in new technology / environmental development businesses that also promote new jobs.  While the agreement gave the Authority the right to audit SPEC’s records, it did not give the Authority the right to approve SPEC’s investments.  Therefore, in 2009, the Audit Committee approved the engagement of the Authority’s independent auditor, Ernst & Young (‘E&Y’), to perform agreed-upon procedures that would provide assurance that SPEC’s investments (2006 to 2009) were consistent with the terms (i.e. investment criteria, etc.) of its agreement with the Authority.

 

“In May, 2012, the Audit Committee approved the engagement of KPMG to perform an investigation of the Authority’s per diem payment practices at the upstate plants.  The initial funding for this project, estimated to cost $100,000, came from funds existing within the contract that were not specifically allocated and not expended nor committed.

 

“On July 31, 2012, the Audit Committee approved the engagement of KPMG to provide tax and other consulting services for the planning, structuring and operation of the proposed joint venture identified as the Transco project.  As planned, Transco’s membership would consist of NYS’ public and private transmission owners and focus on developing transmission projects to expand NYS’ power system.  The initial funding for this project, estimated to cost $70,000 for 2012, also came from funds existing within the contract that were not specifically allocated and not expended nor committed.

 

DISCUSSION

 

“It has been approximately three years since the issuance of E&Y’s report on agreed-upon procedures concerning SPEC’s investments.  Staff has determined that an updated review of SPEC’s investment activities, covering the last three years, from 2010 thru 2012, should be performed.  Therefore, at the request of staff, KPMG has provided their estimated fee to perform agreed-upon procedures concerning SPEC’s investment activities, for the three-year period from 2010 thru 2012.  KPMG’s fee for performing this work, which will be billed at the hourly rates in Compensation Schedule C-Non-Audit Services, included in its contract with the Authority, is estimated to be $60,000 including out-of-pocket expenses.  Staff considers KPMG’s estimated fee to be reasonable.  The Authority’s contract with KPMG requires the pre-approval by the Audit Committee of non-audit services.  

 

“Based on a current review by staff of the Authority’s contract with KPMG ($1,600,000) and a current forecast of future services, staff concluded that additional funding of $180,000 would be required in connection with the following projects: 1) $20,000 for KPMG to complete its work relating to the special per diem review;

2) $100,000 for KPMG’s 2013 services relating to the Transco project; and 3) $60,000 for agreed-upon procedures concerning SPEC’s investment activities.  In accordance with the Authority’s Expenditure Authorization Procedures, the Executive Vice President and Chief Financial Officer is authorized to approve funding up to 25% ($400,000) above the Trustees’ approved limit ($1,600,000).  Therefore, in February, 2013, staff requested, and the Executive Vice President and Chief Financial Officer approved, $180,000 of additional funding for the Authority’s contract with KPMG.

 

RECOMMENDATION

 

“The Vice President and Controller recommend that the Audit Committee approve the engagement of KPMG to perform agreed-upon procedures relating to SPEC’s investment activities, for the three years from 2010 thru 2012.”

 

                Mr. Thomas Concadoro provided highlights of the item to the Committee.   In response to a question from Chairman Flynn, Mr. Concadoro said, under this agreement, KPMG would be engaged to perform procedures to verify contract compliance regarding investments by Seaway Private Equity Corporation (“SPEC”).  Ms. McCarthy added that, based on the Agreement between the Authority and SPEC, SPEC decides which organizations will benefit from the funds received from the Authority.  This audit will provide the Authority with a mechanism to help ensure that the funds are being allocated in accordance with the Agreement.

                Responding to a question from Chairman Flynn, Mr. Russak said the types of businesses that receive the funds are energy and technology related firms in the North Country.  He added that the funds were provided as part of the relicensing agreement and staff is asking that the Audit Committee allow periodic independent review of those investments to make sure SPEC is properly allocating the funds.

                The following resolution, as submitted by the Vice President and Controller was approved by the Audit Committee.

               

                RESOLVED, That the Audit Committee hereby authorizes the engagement of KPMG LLC to perform agreed- upon procedures relating to Seaway Private Equity Corporation’s (“SPEC”) investment activities, for the three years from 2010 through 2012, under the existing contract with KPMG for independent accounting services.

 


8.                   Motion to Conduct an Executive Session

Mr. Chairman, I move that the Authority conduct an executive session pursuant to the Public Officers Law of the State of New York section §105 to discuss matters leading to the appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation.  Upon motion made and seconded, an Executive Session was held.


9.                   Motion to Resume Meeting in Open Session

 

Mr. Chairman, I move to resume the meeting in Open Session.   Upon motion made and seconded, the meeting resumed in Open Session.

 


10.                Next Meeting

                                   

Chairman Flynn said that the next regular meeting of the Audit Committee will be held on Tuesday, July 23, 2013, at 9:30 a.m. in White Plains, New York.

 

 


Closing

                On motion made and seconded, the meeting was adjourned by the Chairman at approximately 11:00 a.m.

 

 

 

Description: Delince Signature

 

Karen Delince

Corporate Secretary