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Resolutions of
The Board of Trustees

Lincoln University, PA

April 16, 2005

RESOLUTION CONCERNING                                                                                         RES202_041605

WHEREAS, The Federal Government has issued regulations concerning controls over financial reporting, for stock companies, in an act named the Sarbanes-Oxley Act; and

WHEREAS, Lincoln University has issued commercial paper in the form of Revenue Bonds; and

WHEREAS, The commercial investment community uses this Act as a standard of proper financial reporting controls; and

WHEREAS, Lincoln University, as a non-profit organization, is not legally required to conform to the Sarbanes-Oxley Act deems that it is in the best interest of the University to apply appropriate and applicable sections of the Act that would strengthen the University’s procedures and its stature in the investment community; and

WHEREAS, The National Association of College and University Business Officers (NACUBO) has recommended several actions for non-profits to emulate from the Sarbanes-Oxley Act; and

WHEREAS, The Audit Committee of the Board of Trustees recognizes that the University has accomplished setting in place systems and procedures that have provided the necessary controls, such that the University has had no A-133 findings for the past three years resulting in the University being qualified as a “low-risk auditee” and Management Letters with comments of minor significance.  Wishing to maintain and improve upon this accomplishment, the Audit Committee has reviewed the Sarbanes-Oxley Act, NACUBO’s recommendations and the University’s current practices and has determined which actions are relevant for Lincoln University and would further strengthen our processes; now, therefore be it

RESOLVED, That the provisions of this Resolution combined with the policies of the Audit Committee will constitute the University’s acknowledgement and concurrence with the Sarbanes-Oxley Act; and further

RESOLVED, That the University’s Policies concerning the hiring of and practices of its External Financial Auditors are:

·    The Board through an approved Resolution will yearly (February meeting) affirm the hiring of the External Financial Auditors.
·    All work or services performed for the University by the External Financial Auditors requires the prior approval of the Board or the Audit Committee. 
·    The current lead external audit partner may serve two more years. After that time the Committee shall instruct the auditors to rotate the engagement partner or principal every three years or less, with a time out period of at least two years.
·    That the Audit Engagement Letter is to be addressed to the Audit Committee with a copy to the President.  Both the Audit Committee Chair and the President will continue to sign the document signifying that the Board accepts the Engagement and that the University understands the engagement.     
·    That the University’s Financial Audit engagement will be re-bid every six years.  The incumbent auditors will be allowed to re-bid. 
·    That the Audit Committee shall be provided with a copy of the University’s Letter of Representation to the External Financial Auditors that is signed by the President and the Vice President of Fiscal Affairs. 
·    Those individuals who have been either an engagement partner or principal of our external auditor within the past two years are prohibited from being hired as the Vice President for Fiscal Affairs; and further

RESOLVED, That the University is prohibited from granting any personal loans to any officer of the University without full Board review and approval; and further 

RESOLVED, That the following statement be added to the Board of Trustees Conflict of Interest Statement and to the University’s Code of Conduct:

Dealings with auditors – It is in the best interest of the University that Trustees/ Employees, who have contact with our various federal, state and other auditors, treat them with respect and honesty.  No Trustee/Employee or University Representative may take an action to fraudulently influence, coerce, manipulate or mislead an auditor engaged in the performance of an audit for the purpose of rendering the financial reports and statements of the audit to be misleading;
and further

RESOLVED, That a confidential complaint mechanism shall be established for the reporting of financial improprieties.  A beta mechanism shall be in place before the September Board meeting.  Details will be discussed at future meetings; and further

RESOLVED, That the University shall establish and document an adequate internal control structure and procedures for financial reporting as an integral part of it’s implementation of the new Administrative and Financial system; and further

RESOLVED, That the Vice President for Fiscal Affairs shall continue to sign the University’s tax returns.

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