The New America High Income Fund, Inc.
Amended and Restated
Audit Committee Charter
- Mission Statement.
The Audit Committee (the "Committee") is intended to assist the Board of Directors (the "Board") of the New America High Income Fund, Inc. (the "Fund") in effectively performing its functions under the Investment Company Act of 1940, as amended (the "1940 Act"), and Maryland law. The purposes of the Committee are as follows:
- Oversee the accounting and financial reporting processes of the Fund and its internal control over financial reporting and, as the Committee deems appropriate, to inquire into the internal control over financial reporting of certain third-party service providers;
- Oversee the quality and integrity of the Fund's financial statements and the independent audit thereof;
- Oversee, or, as appropriate, assist Board oversight of, the Fund's compliance with legal and regulatory requirements that relate to the Fund's accounting and financial reporting, internal control over financial reporting and independent audits;
- Approve prior to appointment the engagement of the Fund's independent auditors and, in connection therewith, to review and evaluate the qualifications, independence and performance of the Fund's independent auditors and the audit partner in charge of leading the audit; and
- Act as a liaison between the Fund's independent auditors and the full Board.
The primary function of the Committee is oversight. The Committee is not responsible for managing the Fund or for performing tasks that are delegated to the officers of the Fund, any investment adviser to the Fund (referred to generically throughout as the "Adviser"), the custodian of the Fund (the "Custodian"), and other service providers for the Fund. It is management's responsibility to maintain appropriate systems for accounting and internal control over financial reporting, and the auditor's responsibility to plan and carry out a proper audit. Specifically, Fund's management is responsible for: (1) the preparation, presentation and integrity of the Fund's financial statements; (2) the maintenance of appropriate accounting and financial reporting principles and policies; and (3) the maintenance of internal control over financial reporting and other procedures designed to assure compliance with accounting standards and related laws and regulations. The independent auditors are responsible for planning and carrying out an audit consistent with applicable legal and professional standards and the terms of their engagement letter. Nothing in this Charter shall be construed to reduce the responsibilities or liabilities of the Fund's service providers, including the auditors.
Although the Committee is expected to take a detached and questioning approach to the matters that come before it, the review of a Fund's financial statements by the Committee is not an audit, nor does the Committee's review substitute for the responsibilities of the Fund's management for preparing, or the independent auditors for auditing, the financial statements. Members of the Committee are not full-time employees of the Fund and, in serving on this Committee, are not, and do not hold themselves out to be, acting as accountants or auditors. As such, it is not the duty or responsibility of the Committee or its members to conduct "field work" or other types of auditing or accounting reviews or procedures.
In discharging their committee duties the members of the Committee are entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: (1) one or more officers of the Fund whom the Director reasonably believes to be reliable and competent in the matters presented; (2) legal counsel, public accountants, or other persons as to matters the Director reasonably believes are within the person's professional or expert competence; or (3) a Board committee of which the Director is not a member as to a matter within its designated authority. The Committee also relies upon the officers of the Fund, the Adviser, the independent auditors for the Fund, the Custodian, and other service providers for the Fund promptly to identify and report to the Committee potential concerns, conflicts of interest, and other issues that require the attention of the Committee. It is the responsibility of the officers of the Fund, the Adviser, the independent auditors for the Fund, the Custodian, and other service providers promptly to report to the Committee any matters that arise within the scope of authority of the Committee.
The 1940 Act, the Articles of Incorporation of the Fund, and Maryland law impose upon the independent directors fiduciary standards that govern their work on behalf of the Fund. Nothing in this Charter is intended to modify those fiduciary standards. Nor does this Charter modify any indemnities or other rights of the independent directors under the Articles of Incorporation or By-Laws of the Fund or otherwise.
- Members and Qualifications.
- The Committee shall consist of all of the independent directors of the Fund, i.e., each director who is not an "interested person" of the Fund, as defined in Section 2(a)(19) of the 1940 Act. As long as shares of the Fund are listed on any national securities exchange or national securities association (generally, a "Listing Entity"), the composition of the Committee shall also meet such requirements as may be imposed from time to time by that Listing Entity. No member of the Committee shall receive any compensation from the Fund except compensation for service as a member of the Board or a committee thereof.
- Each member of the Committee shall on an annual basis complete a questionnaire circulated by counsel for the Fund for the purpose of confirming that the member remains an independent director.
- Each member of the Committee shall, to the extent consistent with the member's personal financial circumstances, maintain an investment in the Fund.
- As deemed necessary to meet the Fund's reporting requirements on Form N-CSR, the Board shall consider whether the Committee has at least one "audit committee financial expert" within the meaning of Form N-CSR.
- The Committee shall meet separately from the full Board at least annually at such times and locations as the Committee may determine. Notice of each meeting of the Committee shall be given by the Secretary or Assistant Secretary.
- The agenda for each meeting of the Committee shall be prepared and maintained by the Secretary or an Assistant Secretary of the Fund. The Secretary or an Assistant Secretary of the Fund shall prepare and retain minutes of Committee meetings and appropriate documentation of decisions made outside of meetings by delegated authority.
- The Committee shall ordinarily meet in person; however, members of the Committee may attend telephonically, and the Committee may act by written consent to the extent permitted by law and by the Fund's By-Laws.
- The Committee shall regularly meet, in separate executive sessions, with representatives of Fund management, including with any internal auditors (or other personnel responsible for any internal audit of the Fund) and the Fund's independent auditors. The Committee may also request to meet with legal counsel and compliance personnel of the Adviser(s) and with other services providers that provide significant accounting or administrative services to the Fund to discuss matters relating to the Fund's accounting and compliance as well as other Fund-related matters.
- At any meeting of the Committee a majority of its members shall constitute a quorum. When a quorum is present at any meeting, a majority of Committee members present may take any action, except where a larger vote is expressly required by law or by the Fund's Articles of Incorporation or By-Laws.
- The Committee may select one of its members to be the chairperson and may select a vice chairperson.
- The Board shall adopt and approve this Charter and may amend it on the Board's own motion. The Committee shall review this Charter at least annually and recommend to the full Board any changes the Committee deems appropriate. The Committee may establish rules and procedures for the conduct of their meetings that are consistent with this Charter.
- Organization Matters.
- The Committee shall have the authority to require officers of the Fund, the Adviser, the Custodian, and other service providers for the Fund to respond to inquiries, prepare reports, and produce documentation concerning the Fund and their work on behalf of the Fund.
- The Committee may seek advice from (i) any counsel for the independent directors or (ii) the independent auditors and may ask such counsel and auditors to investigate particular matters.
- The Committee shall have the resources and authority appropriate to discharge its responsibilities, including appropriate funding, as determined by the Committee, for payment of (i) compensation to the auditors for the purpose of conducting the audit and rendering their audit report and (ii) the Committee's ordinary administrative expenses, the authority to retain and compensate special counsel and other experts or consultants as the Committee deems necessary, and the authority to obtain specialized training for Committee members, at the expense of the Fund.
- Duties and Powers of the Committee with respect to Audit Functions.
The Committee shall have the following duties and powers with respect to audit functions to the extent required by law or as deemed necessary or advisable by the Committee:
- to approve prior to appointment the engagement of auditors to annually audit and provide their opinion on the Fund's financial statements, to select, retain, or terminate the Fund's independent auditors and, in connection therewith, to oversee the work of the Fund's independent auditors for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Fund, to set clear policies regarding the Fund's hiring of employees or former employees of the independent auditors, and to review and evaluate matters potentially affecting the independence and capabilities of the auditors;
- to receive such other communications or reports from the independent auditor (and management's responses to such reports and communications) as may be required by the Fund's applicable Listing Entity, including as appropriate, at least annually, obtain and review a report by the Fund's independent auditor describing: (1) the independent auditor's internal quality-control procedures, any material issues raised by the most recent internal quality-control review or peer review of the independent auditor, or any inquiry or investigation by governmental or professional regulatory authorities (including the Public Company Accounting Oversight Board), within the preceding five years, respecting one or more independent audits carried out by the independent auditor, and any steps taken to deal with any such issues and (2) all relationships between the independent auditor and the Fund and any other relationships or services that may impact the objectivity or independence of the independent auditor;
- to approve prior to appointment the engagement of the auditor to provide other audit services to the Fund or to provide non-audit services to the Fund, any Adviser or any entity controlling, controlled by, or under common control with any Adviser ("Adviser Affiliate") that provides ongoing services to the Fund, if the engagement relates directly to the operations and financial reporting of the Fund subject to such exceptions as may be available under applicable law;
- to develop, to the extent deemed appropriate by the Committee, policies and procedures for pre-approval of the engagement of the Fund's auditors to provide any of the services described in (c) above;
- to consider the controls applied by the auditors and any measures taken by management in an effort to assure that all items requiring pre-approval by the Committee are identified and referred to the Committee in a timely fashion;
- to consider whether the non-audit services provided by the Fund's auditor to any Fund Adviser or any Adviser Affiliate that provides ongoing services to the Fund, which services were not pre-approved by the Committee, are compatible with maintaining the auditor's independence;
- to review the arrangements for and scope of the annual audit and any special audits;
- to review and approve the fees proposed to be charged to the Fund by the auditors for each audit and non-audit service;
- to consider information and comments from the auditors with respect to the Fund's accounting and financial reporting policies, procedures and internal control over financial reporting (including the Fund's critical accounting policies and practices), to consider management's responses to any such comments and, to the extent the Committee deems necessary or appropriate, to promote improvements in the quality of the Fund's accounting and financial reporting;
- to consider information and comments from the auditors with respect to, and meet with the auditors to discuss any matters of concern relating to, the Fund's financial statements, including any adjustments to such statements recommended by the auditors, and to review the auditors' opinion on the Fund's financial statements;
- to review and discuss with the independent auditors the matters required to be communicated to the Committee with respect to the Fund under applicable accounting standards, to receive such other communications or reports from the independent auditors (and management's responses to such reports or requirements) as may be required by the applicable Listing Entity or otherwise and to resolve any unresolved disagreements between management and the independent auditors;
- to review and discuss with management and the independent auditors the audited financial statements and unaudited semi-annual financial statements of the Fund, and to review and discuss any commentary by Fund management or the Fund's investment adviser included in the Fund's shareholder reports; provided that discussion with the independent auditors shall not be required with respect to any financial statements that were not the subject of a review by the independent auditors;
- to discuss the Fund's earnings releases, as well as financial information and earnings guidance provided to analysts and rating agencies, in the event the Fund issues any such releases or provides such information or guidance;
- to consider the Fund's major financial risk exposures and the steps management has taken to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken;
- to take such action as is necessary to prepare the disclosure required by Item 407(d)(3)(i) of Regulation S K for inclusion in the Fund's proxy or information statement relating to its annual meeting;
- to review with the Fund's principal executive officer and/or principal financial officer in connection with required certifications on Form N CSR any significant deficiencies in the design or operation of internal control over financial reporting or material weaknesses therein and any reported evidence of fraud involving management or other employees who have a significant role in the Fund's internal control over financial reporting;
- to establish and maintain procedures for the receipt, retention and treatment of complaints received by the Fund relating to accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the Fund or any Adviser, administrator, principal underwriter or other provider of accounting related services to the Fund of concerns about accounting or auditing matters, which procedures are currently set forth in Appendix A, and to address reports from attorneys or auditors of possible violations of federal or state law or fiduciary duty;
- to investigate or initiate an investigation of reports of improprieties or suspected improprieties in connection with the Fund's accounting or financial reporting;
- to report its activities to the full Board on a regular basis and to make such recommendations with respect to the above and other matters as the Committee may deem necessary or appropriate;
- to perform such other functions and to have such powers as may be necessary or appropriate in the efficient and lawful discharge of the powers provided in this Charter or which have been referred to the Committee by the full Board; and
- to evaluate its performance at least annually.
The Committee may delegate any portion of its authority, including the authority to grant pre-approvals of audit and permitted non-audit services, to a subcommittee of one or more members. Any decisions of the subcommittee to grant pre-approvals shall be presented to the full Committee at its next regularly scheduled meeting.
Adopted February 17, 2000;
amended April 20, 2000, June 27, 2002, February 19, 2004, December 19, 2005, February 11, 2010, October 28, 2010, February 14, 2013, February 12, 2014, and December 18, 2014.
The Audit Committee (the "Committee") of The New America High Income Fund, Inc. (the "Fund") employs the following procedures (the "Procedures") with respect to complaints regarding accounting, internal accounting controls or auditing matters concerning the Fund ("Complaints"). Each Employee (as defined below) shall be provided with a copy of the Procedures upon assuming his or her duties as an Employee, and annually thereafter.
Procedures for Receiving Complaints
All officers and employees of the Fund and, to the extent their duties relate to accounting, internal accounting controls or auditing matters for the Fund, the officers and employees of any Fund investment adviser, administrator, principal underwriter or other provider of accounting related services to the Fund (collectively referred to herein as "Employees"), may make complaints anonymously and in a confidential manner as follows:
Procedures for Treating Complaints
The Committee member who initially receives a Complaint (the "Evaluating Committee Member") will conduct an initial evaluation (an "Initial Evaluation") of the Complaint as soon as reasonably practicable following receipt. The Evaluating Committee Member will determine whether the Complaint actually relates to the Fund's accounting, internal accounting controls or auditing matters and, if not, whether it should be reviewed by a party other than the Committee. The Evaluating Committee Member shall also determine whether the Complaint requires investigation by the Committee. In conducting an initial evaluation, the Evaluating Committee Member may consult with counsel to the Directors who are not "interested persons" of the Fund within the meaning of the Investment Company Act of 1940, as amended, and/or other Committee members. A Committee member may not be the Evaluating Committee Member for, or otherwise consulted with respect to, a Complaint that relates to improprieties by that Committee member.
- The complaining Employee may place a telephone call to any member of the Committee. During this phone call, the Employee should identify the source of his or her Complaint and the practices that are alleged to constitute an impropriety with respect to accounting, internal accounting controls or auditing matters relating to a Fund, providing as much detail as possible.
- Alternatively, the Employee may submit to any member of the Committee (by hand, mail, e-mail or fax) a confidential memorandum which details the Employee's Complaint and the practices that are alleged to constitute an improper accounting, internal accounting control or auditing matter, providing as much detail as possible.
- The name and contact information for each member of the Committee will be provided to Employees when they are given the Procedures and updated as necessary.
After the initial evaluation is complete, all Complaints requiring investigation by the Committee will be discussed at the next regularly-scheduled meeting of the Committee, or a specially scheduled meeting in advance thereof. The Committee shall investigate the Complaints as follows:
Any party designated to investigate a Complaint shall be provided reasonable access to the Fund's (and to the extent deemed necessary by the Committee, the Fund's service providers') employees, documents, and computer systems for purposes of conducting the investigation. At the conclusion of its investigation, which shall be completed as promptly as practicable after referral of the Complaint, the investigating party will be responsible for making a full report to the Committee with respect to the Complaint and to make recommendations for corrective actions, if any, to be taken by the Fund. The Committee will then report to the Board of Directors at its next regularly-scheduled meeting with respect to the Complaint and any corrective actions recommended by the Committee. If the Complaint involves improprieties of any member of the Board of Directors, the Committee may make its report in an executive session of the Board of Directors.
- the Committee may choose to investigate the Complaint through its own members and/or with the assistance of counsel;
- the Committee may select a designee within the Fund or its service providers to investigate the Complaint, provided that the identity of the complaining Employee shall not be disclosed to such designee. Under no circumstances will a party who has direct supervisory control over, or who may be responsible for, the action giving rise to the Complaint be charged with investigating that action;
- the Committee may retain an outside party (other than the Fund's independent auditors) to investigate the Complaint; or
- the Committee may investigate the Complaint in such other manner as the Committee deems appropriate.
Procedures for Retaining Complaints
The Chairperson will be responsible for ensuring that all Complaints received by the Committee, together with any documents pertaining to the Committee (or its designee's) investigation and treatment of the Complaint, are retained for six years, or for such longer period as may be required by applicable law, in a manner consistent with preserving the anonymity of Employees who have submitted Complaints.