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Finance Committee Terms of Reference
Approving Authority: Board of Governors
Original Approval Date: July 1, 1989
Effective Date: September 1, 2021
Date of Most Recent Review: June 23, 2021
Previous Reviews: October 16, 2018; June 5, 2014; April 17, 2012; April 20, 2011; April 14, 2010; October 2, 2008; April 7, 2004; September 28, 2000; November 16, 1995
The Finance Committee is responsible for the oversight of policy, risk and other matters pertaining to the University’s financial resources. The committee’s objective is to ensure that the University’s financial resources are allocated strategically, and its revenues and investments managed appropriately, so that it can fulfill its mission and maintain a sound fiscal condition both in the immediate and longer-term.
2.1. Financial Planning
2.1.1. Review and make recommendations to the Board of Governors concerning multi-year financial goals and related plans including those arising from the University’s Integrated Planning process and long-term capital expenditure planning activities. Monitor progress of these plans and progress towards achieving long-term goals.
2.1.2. Monitor financial health and related risks for the University including those pertaining to government funding, capital spending, fundraising, endowments, pension plans and other post-employment benefits.
2.1.3. Guide the development and maintenance of financial health indicators for the University that can assist the Committee with its responsibilities for long-term financial planning and related oversight.
2.2. Operating and Capital Budget Planning and Review
2.2.1. Review and make recommendations to the Board of Governors concerning the annual operating and capital budgets, including tuition and other student fee rates as well as ancillary operations. Recommendations will be offered in the context of multi-year financial goals and related plans and will be directed to enhancing the institution’s long-term financial health.
2.2.2. In consultation with the Physical & Digital Infrastructure Committee, review and make recommendations to the Board of Governors concerning all designated project proposals equal to or exceeding $2 million in value concerning the development and maintenance of the University’s lands, buildings, and physical and digital infrastructure, including:
- new construction of buildings or infrastructure
- projects involving major capital maintenance, renovation, additions or replacement of buildings, or physical infrastructure
- acquisition, licensing and maintenance of IT solutions
2.2.3. In consultation with the Physical & Digital Infrastructure Committee, undertake ongoing oversight and monitoring of designated physical and digital infrastructure projects equal to or exceeding $2 million in value.
2.2.4. In consultation with the Physical & Digital Infrastructure Committee, review and make recommendations to the Board of Governors concerning:
- agreements for the purchase, sale, mortgage or transfer of core land or property.
- licenses to use, leases and commitments of core land or facilities located on core land equal to or exceeding $2 million in value or 5 years in length.
2.2.5. In consultation with the Physical & Digital Infrastructure Committee, review strategic documents related to digitization, information technology and related investments.
2.2.6. Review and make recommendations to the Board of Governors concerning the annual integrated plan and operating budget for the University Centre.
2.2.7. Review, at least annually, a report on research income.
2.2.8. Receive, at least annually, an update on the research enterprise, including innovation and commercialization. Receive updates on other strategic research initiatives and agreements and, where appropriate, make recommendations to the Board of Governors.
2.2.9. Review financial statements for the University of Guelph and the University of Guelph-Humber on a semesterly basis, including financial performance against budget.
2.2.10. Review, at least once annually, financial statements pertaining to capital expenditures.
2.2.11. Review the annual Audited Financial Statements for the University of Guelph and the University of Guelph-Humber and provide feedback and any recommendations to the Audit & Risk Committee.
2.3. Financing and Debt Management
2.3.1. Review, at least once annually, a report on the University’s management of expendable funds and borrowing for operating expenses. Monitor activity in the context of relevant Board policies and, where appropriate, make recommendations for policy change.
2.3.2. Review, at least once annually, a report on the University’s management of capital debt. Monitor activity in the context of relevant Board policies and, where appropriate, make recommendations for policy change.
2.3.3. Review, when received by the University, reports on the University’s credit ratings.
2.4. Endowed Investments
2.4.1. Monitor the activities of the Investment Subcommittee (ISC), which acts as a subcommittee of the Finance Committee and exercises regular oversight of the investment of the general endowment fund on its behalf. Ensure the subcommittee is kept advised of any questions or concerns raised by the Finance Committee relative to the investment of the University’s general endowment.
2.4.2. Monitor the investment performance of the University’s general endowment for compliance with the related investment policies and report at least annually to the Board of Governors.
2.4.3. Review annually reporting from the Investment Subcommittee on the performance of endowment investments relative to established ESG benchmarks and progress towards any University-established targets. Review annually reporting on other benchmarks or agreements relating to endowment investments. Report annually on such activities to the Board.
2.4.4. On an annual basis, review the Endowment Investment Policy and any changes recommended by the ISC. In consultation with the Board of Trustees, recommend to the Board revisions or affirmation of the current policy.
2.5.1. Exercise oversight over the University’s fundraising, advancement and development activities and strategy.
2.5.2. Review and make recommendations to the Board of Governors concerning fundraising targets and monitor progress toward achievement of approved targets.
Exercise oversight of policies within the Committee’s mandate, including the following policies and policy areas:
- Advancement (including gift acceptance)
- Finance (including borrowing, capital debt, acquisition and disposition of capital assets, endowment management, and endowment investment policies (excluding the Heritage Fund) and the identification and management of strategic financial risks.
- Acquisition and disposition of core land (in consultation with the Physical & Digital Infrastructure Committee).
As directed by the Audit & Risk Committee, the committee will monitor, receive updates and report on key developments and material risks within the Committee’s mandate, including in the following risk areas:
- Financial Management
- Government Policy
3.1. The committee shall be comprised of the following:
3.1.1. Regular Voting Members
- Up to eight members, who shall normally be members of the Board, with consideration given to ensuring there are members with significant financial management experience.
3.1.2. Ex-Officio Voting Members
- Chair, Board of Governors
- President & Vice-Chancellor
3.1.3. Non-Voting Members
- University Secretary
3.2. No more than one regular voting member of the Audit & Risk Committee shall be a member of the Finance Committee.
3.3.1. The committee Chair shall be appointed by the Board of Governors from among the external members.
3.3.2. The committee Chair shall be consulted as part of the search and hiring process for the position of Vice-President (Finance & Operations) in keeping with the provisions of the Policy on University Appointments.
4. Rules of Order
4.1.1. A quorum for the transaction of business at meetings of the committee shall consist of a majority of the regular voting membership.
4.1.2. In the event a meeting does not achieve quorum, any ex-officio voting members present may be counted as regular voting members for the purposes of establishing quorum.
4.2. Terms of Reference
4.2.1. The Committee shall review its terms of reference on an annual basis and recommend changes to the Governance Committee as necessary.