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Governance Committees

Audit (Charter - PDF)

Purpose and Authority

The Audit Committee of the Board of Directors of FHLBank Pittsburgh (“the Bank”) assists the Board in fulfilling its responsibilities for general oversight of:

• the Bank’s financial reporting processes and the audit of the FHLBank’s financial statements, including the integrity of the Bank’s financial statements;
• the Bank’s administrative, operating and internal accounting controls;
• the Bank’s compliance with legal and regulatory requirements;
• the independent auditors’ qualifications and independence; and
• the performance of the Bank’s internal audit function and independent auditors.

The Committee has the additional duties and responsibilities set forth below.

The Committee has the authority to obtain advice and assistance from outside legal, accounting or other advisors as the Committee deems necessary to carry out its duties, and the Committee shall receive appropriate funding, as determined by the Committee, from the Bank for payment of compensation to the outside legal, accounting or other advisors employed by the Committee.

The Committee has the authority to seek any information it requires from FHLBank officers and employees, all of whom are directed to cooperate with the Committee’s requests, or external parties.

Membership and Structure

The Committee shall consist of at least five directors of the Board. The Committee shall include a balance of representatives from member institutions and will also include a balance of appointive and elective directors. To provide continuity and experience, Committee members shall serve staggered terms.

Each member of the Committee must meet the applicable financial literacy and expertise requirements. At least one member must have adequate accounting or related financial management experience to meet the applicable requirements for designation as “financial expert.”

The Committee shall consist of members of the Board, each of whom shall be independent. Any member of the Board shall be considered sufficiently independent if that Director does not have a disqualifying relationship with the Bank or its management that would interfere with the exercise of that Director’s independent judgment. Such disqualifying relationships include, but are not limited to:

• Being employed by the Bank in the current year or any of the past five years;
• Accepting any compensation from the Bank other than compensation for service as a Board Director;
• Serving or having served in any of the past five years as a consultant, advisor, promoter, underwriter or legal counsel of or to the Bank; or
• Being an immediate family member of an individual who is, or has been in any of the past five years, employed by the Bank as an executive officer.
  

The only compensation a Committee member may receive from the Bank shall be compensation determined by the Board in compliance with applicable rules.

Meetings and Procedures

The Committee shall convene at least 4 times each year, with additional meetings as the Committee deems appropriate. The Committee Chair is responsible for the agenda and minutes. A majority of Committee members shall be present to constitute a quorum for the transaction of the Committee’s business. The Committee shall meet as needed in separate executive sessions and also in private sessions with management, the internal auditors and the independent auditors to facilitate full communication. The Committee shall meet at least twice annually with the Chief Internal Auditor. The Committee shall meet in executive session with both the Chief Internal Auditor and the external auditors at least annually. The Committee shall be given open access to the Bank’s internal auditors, Board, Bank executives and independent auditors, as well as the Bank’s books, records, facilities and other personnel.

Charter

The Committee shall adopt a charter that specifies the scope of the Committee’s authority, responsibilities, structure, processes and membership requirements.

The Committee and the Board shall annually review, assess the adequacy of and, where appropriate, amend the Committee charter; amend the Committee charter as appropriate; and re-adopt and re-approve the Committee charter not less often than every three years.

The Committee shall prepare a written report to be included in the Bank’s Annual Report that will indicate that the Committee is governed by a charter, which will be included as an appendix to the annual report at least once every three years and that all the members of the Committee are independent. The report will include that the Committee has complied with the requirements of the Communication with Audit Committees and has received the written disclosures and letter from the external auditors as required by Independence Standards Board Standard 1.

Duties and Responsibilities

Internal Audit:

1. Review and approve the Internal Audit Charter annually.
2. Select, evaluate, determine the compensation of and, where appropriate, replace the Chief Internal Auditor. The Chief Internal Auditor may be removed only with the approval of the Committee. The Chief Internal Auditor shall report directly to the Committee on substantive matters and is ultimately accountable to the Committee and Board.
3. Provide that the internal auditor shall have unrestricted access to the Committee without the need for any prior management knowledge or approval.
4. Review the overall scope, qualifications, resources, activities, organizational structure and effectiveness of the internal audit function.
5. Review and approve the annual Internal Audit Plan.
6. Review with management and the Chief Internal Auditor the results of their reviews of compliance with applicable laws and regulations and the Bank’s Standards of Business Conduct and internal audit reports, and review with management the results of its reviews of compliance with applicable listing standards.
7. Oversee the internal audit function by reviewing the scope of audit services required, significant accounting policies, the significant risks and exposures and the internal audit activities and findings.

Financial Statements:

1. Review the basis for the Bank financial statements and the external auditor’s opinion rendered with respect to the financial statements including the nature and extent of any significant changes in accounting principles or the application therein.
2. Ensure policies are in place that are designed to achieve disclosure and transparency regarding the Bank’s true financial performance and governance practices.
3. Recommend to the Board, based on review and discussions, whether the audited financial statements should be included in Bank’s Annual Report on Form 10-K.
4. Review other sections of the annual report and related regulatory filings before release and consider the accuracy and completeness of the information.
5. Discuss earnings press releases as well as corporate policies with respect to financial information and earning guidance provided to analysts and rating agencies.
6. Review significant risks or exposures relating to litigation and other proceedings and regulatory matters that may have a significant impact on the Bank’s financial statements.

Internal Controls:

1. Ensure that senior management has established and is maintaining an adequate internal control system within the Bank. This includes the adequacy of the internal controls, the resolution of identified material weaknesses and reportable conditions and the prevention or detection of management override or compromise of the internal control system.
2. Direct senior management to maintain the reliability and integrity of the accounting policies and financial reporting and disclosure practices of the Bank.
3. Review the adequacy and effectiveness of the Bank’s disclosure controls and procedures.
4. Review the adequacy and effectiveness of the Bank’s internal controls, including any significant deficiencies in such controls and significant changes or material weaknesses in such controls reported by the independent auditors, internal auditors or examiners.
5. Review the adequacy and effectiveness of the Bank’s information security policies and the internal controls regarding information security.

Independent Auditors:

1. Oversee the work of any registered public accounting firm employed by the issuer for the purpose of preparing or issuing an audit report or related work and ensure that each such registered public accounting firm shall report directly to the Committee. Make recommendations to the Board regarding the appointment, evaluation, renewal, compensation and/or termination of the independent auditor. Require the independent auditor to rotate the lead audit partner, and the partner responsible for reviewing the audit at least every five years or as required by applicable regulations.
2. Review and approve in advance the scope of the fiscal year’s independent audit and the audit fee as documented in the engagement letter.
3. Establish policies for the independent auditors’ activities and any fees beyond the core audit, approve in advance all non-audit services to be performed by the independent auditors that are not otherwise prohibited by law and associated fees, and monitor the usage and fees paid to the independent auditors. The Committee delegates to the Chair of the Committee the authority to pre-approve non-audit services not prohibited by law to be performed by the independent auditors. The Chair shall report any decision to pre-approve such services to the full Committee at its next meeting.
4. Obtain annually a written statement from the independent auditors regarding their independence for compliance with Independence Standards Board Standard 1.
5. Discuss with the independent auditors the requirements of Statement on Auditing Standards 61 regarding communications with audit committees and 89 and 90 regarding uncorrected misstatements and the quality of the Bank’s accounting principles and underlying estimates in the financial statements.
6. Review and discuss with the independent auditors their annual written statement delineating all relationships or services between the independent auditors and Bank, or any other relationship or services that may impact their objectivity and independence.
7. Set clear hiring policies for employees or former employees of the independent auditors, and monitor compliance with such policies.
8. Review with management and the independent auditors:
   1. The Bank’s annual audited and quarterly financial statements, including the Bank’s disclosures in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
   2. the results of the independent auditors’ audit and the independent auditors’ opinion on the annual financial statements;
   3. the independent auditors’ judgments on the quality, not just the acceptability, and consistent application of the Bank’s accounting principles, the reasonableness of significant judgments, clarity of disclosures and underlying estimates in the financial statements;
   4. changes in accounting principles or application thereof, significant judgment areas, and significant and complex transactions;
   5. the effectiveness and adequacy of the Bank’s internal auditing; and
   6. any disagreements between management and the independent auditors, about matters that individually or in the aggregate should be significant to the Bank’s financial statements or the independent auditors’ report, and any serious difficulties the independent auditors encountered in dealing with management related to the performance of the audit.
9. At least annually, obtain from and review a report by the auditors describing (a) the independent auditors’ internal quality control procedures and (b) any material issues raised by the most recent internal quality-control review, or peer review, or by any governmental or professional inquiry or investigation within the preceding year regarding any audit performed by the independent auditors, and any steps taken to deal with such issues.
10. Provide that the external auditor shall have unrestricted access to the Committee without the need for any prior management knowledge or approval.

Compliance:

1. Review the policies and procedures established by senior management designed to ensure compliance with applicable laws, regulations and policies and monitor the results of these compliance efforts.
2. Receive and, if appropriate, respond to attorneys’ reports of evidence of material violations of securities laws and breaches of fiduciary duty on similar violations of U.S. or state law.
3. Review the results of significant investigations, examinations or reviews performed by regulatory authorities and management’s response.

Concerns Reporting Process and Fraud:

1. Provide oversight over the Bank’s antifraud program by ensuring senior management has implemented and adequately communicated appropriate fraud deterrence and prevention measures creating an adequate tone at the top. This includes monitoring the administration and compliance with policies and procedures such as the concerns reporting process, Code of Conduct, Fraud and Insider Trading Policy, Ethics Reporting Procedures, fraud risk assessment process and overall antifraud program awareness measures.
2. Provide an independent review and follow-up on any activity of significance reported through the anonymous reporting mechanism (e.g., whistleblower program) or through the BOD-established Ethics Officer on questionable accounting or auditing matters and compliance with the Code.
3. Actively seek training and guidance from internal audit or other sources to develop and maintain the Committee’s understanding and awareness of the causes and consequences of frauds common to the banking industry.
4. Ensure that internal audit integrates fraud considerations in their annual risk assessments executed for preparation of their annual audit plan and establishes procedures for assisting in the deterrence and detection of fraud commensurate with the extent of the potential exposure/risk of fraud in the various segments of the organization’s operations.
5. Discuss with the external audit firm and internal audit their views on the potential for fraud, as well as considerations in planning their audits, including their fraud risk assessment, and any fraud issues or concerns identified during the performance of their audits.
6. Consider the potential for management override of financial reporting controls to manipulate results of operations. Consider the potential for fraud when addressing other areas of responsibilities defined in this charter such as accounting principles, policies, estimates used by management and significant non-routine transactions.

Other:

1. Review the policies and procedures established by senior management to assess and monitor implementation of the Bank’s strategic business plan and the operating goals and objectives contained therein.
2. Review and approve all “related party transactions,” as defined in applicable rules.
3. Conduct or authorize investigations into any matters within the Committee’s scope of responsibilities.
4. Consider such other matters regarding the Bank’s financial affairs, its controls and the internal and independent auditors of the Bank as the Committee, in its discretion, may determine to be advisable.
5. Report regularly to the Board with respect to the Committee’s activities.
   

Community Investment & Public Policy (Charter - PDF)

Purpose

The Federal Home Loan Bank of Pittsburgh is a partnership of private capital and public sponsorship that enables financial institutions to assure the flow of credit and other services for housing, community development and other general community banking needs. The Board of Directors of the Bank is committed to promoting and enhancing the Bank’s fulfillment of this mission.

To achieve this goal, the Community Investment and Public Policy Committee will serve the Board of Directors of the Federal Home Loan Bank of Pittsburgh by providing guidance and oversight of:

• The Bank’s fulfillment of its affordable housing and community investment mission described in the Bank’s Strategic Plan;
• The use of the Bank’s technical and financial resources and partnering with other funding sources to enhance the quality of life in Delaware, Pennsylvania and West Virginia;
• The education of market participants and the pursuit of new opportunities for the Bank’s community investment products and services throughout the District;
• The continuing development of the Affordable Housing Program, Community Lending Program, Banking On Business, First Front Door and other special financing programs;
• The implementation of partnership programs with Housing and Economic Development Agencies and Foundations which enable the Bank to leverage community investment resources;
• The relationship between the Board and the Affordable Housing Advisory Council;
• Actions to enhance public awareness of the Bank and its contributions in both the private and public sector; and
• Legislative and regulatory developments which affect the Bank’s mission or influence its definition.

Membership and Meetings

The Board shall appoint the members of the Community Investment and Public Policy Committee and shall designate its Chairperson. The Committee shall meet as requested by either the Committee Chairperson or the President. The Bank’s Director, Community Investment Officer shall serve as Secretary to the Committee. Written minutes shall be prepared for each meeting by the Secretary, and the approved original forwarded to the Corporate Secretary for filing with the Federal Housing Finance Board and distribution to the full Board of Directors.

Executive (Charter - PDF)

Purpose

The Executive Committee may exercise all of the powers of the Board of Directors in the management and direction of the affairs of the Bank during the intervals between the regular meetings of the Board of Directors in all cases in which specific directions were not provided for by the Board of Directors. All action by the Executive Committee shall be reported to the Board of Directors at its next meeting succeeding such action and shall be subject to revision and alteration by the Board of Directors; provided, however, that no rights of a third party shall be affected by any such revision or alteration.

Membership

The Executive Committee shall consist of the Chairman of the Board, who shall serve as Chairman of the Executive Committee, and the Chairman of each Standing Committee of the Board of Directors. In the event that any member(s) of the Executive Committee are unavailable for duty, any member of the Board of Directors may be selected by the person calling a meeting of the Executive Committee and may serve and shall be in power to act as an alternate member of the Committee. The Executive Committee may act by the written resolution of a quorum thereof although not formally convened; it shall fix its own rules and procedures; and shall also meet at the call of the Chairman, Vice Chairman, the Chief Executive Officer or other officer of the Bank. The Secretary of the Executive Committee shall be the Corporate Secretary. Regular minutes of the proceeding of the Executive Committee shall be kept in a book provided for that purpose.

Finance and Risk Management (Charter - PDF)

Purpose

The Finance and Risk Management Committee is a subcommittee of the Board of Directors of the Federal Home Loan Bank of Pittsburgh that oversees, on behalf of the Board, the integration of risk management in the Bank through the enterprise risk management (risk) process as well as financial management and member product policies and practices. The Committee monitors the risk framework, promotes effective management of all risk categories, and fosters the establishment and maintenance of a risk culture throughout the Bank.

Responsibilities

The vommittee oversees the Bank's risk management functions including risk, financial and member product policies and practices to determine if the mechanisms are commensurate with the extent and complexity of the Bank’s business activities. Specifically, the Committee will fulfill the following key responsibilities:

• Reviews all key risk management and member product policies with
  recommendations for approval to the full Board of Directors;
• Verifies compliance with the risk management policies approved by the Board of Directors;
• Informs the Board about the status of risk exposures and risk management processes in the Bank, especially when Board-approved policy limits are breached;
• Oversees the risk framework and the activities of the management level risk committees, which oversee the Bank’s management of enterprise risk categories;
• Assists the Board in the oversight of the Bank by assuring that there is adequate monitoring, testing and reporting of risk management processes;
• Periodically reviews and approves proposals regarding financial, investment, credit, and operating risk management strategies and key decisions of the management level risk committees; and
• Reviews the development of new member, investment and mission-related products and programs.

By performing the above key responsibilities, the Committee assists the Board of Directors to meet its fiduciary obligations in assuring that the Bank is operated safely and soundly, and in conformance with the regulations and policies of the Federal Housing Finance Board and the Securities and Exchange Commission.

Membership and Meetings

The Board of Directors shall appoint the members of the Committee and shall designate the Chairperson. Sufficient meetings will be scheduled to permit full and timely oversight of the Bank’s risk management functions. Meetings will generally be held in person in conjunction with, and prior to, the meetings of the Board of Directors. The committee will report on its activities and actions to the Board of Directors after each of its meetings.

The Bank's Chief Risk Officer will serve as Secretary to the Committee. Written minutes of the Committee will be prepared by the Secretary for each meeting with the approved original forwarded to the Corporate Secretary for filing with the Federal Housing Finance Board and distribution to the full Board of Directors.

Governance (Charter - PDF)

Purpose

The Governance Committee will have general responsibility to assist the Board of Directors in developing and maintaining best practices in governing the Bank. In this role, the Governance Committee shall:

• Serve as the nominating committee for:
  • The election of the Chair and Vice Chair of the Board of
    Directors;
  • The appointment of the Chairs and members to the standing committees of the Board; and
  • Candidates to fill vacancies on the Board.
• Conduct evaluations on:
  • The effectiveness of the Board of Directors and
  • The effectiveness of individual Directors.
• Provide oversight and guidance on the election of Directors process;
• Review and recommend levels of coverage for Directors and Officers liability insurance and other fiduciary coverages;
• Review and recommend Compensation of Directors;
• Review the Bank’s Code of Conduct and Ethics Programs;
• Develop the position descriptions for the Chair, CEO and Committee Chairs; and
• Develop the Bank’s governance principles.
  

Membership and Meetings

The Board shall appoint the members of the Governance Committee and shall designate its Chairperson. The Committee shall meet as necessary to adopt new rules to ensure that the operations of the Bank remain in conformity with the changes in the law. The Bank’s General Counsel shall serve as the Secretary to the Committee. The Secretary shall prepare written minutes for each meeting, and the approved minutes shall be forwarded to the Corporate Secretary for filing and distribution to the full Board.

Human Resources (Charter - PDF)

Purpose

The Human Resources Committee will serve the Board of Directors by providing oversight and guidance with respect to Human Resources policies and practices. The Committee has principal oversight of the Bank's performance in fulfilling the "People-centric Culture" Imperative described in the Strategic Plan. Also, the Committee will assure that the Bank creates and maintains competitive programs which attract, develop, motivate, reward and retain employees committed to superior performance and the highest professional and ethical standards. The Committee will ensure that the Human Resources policies support the Bank's strategic mission and comply with all applicable legal and regulatory requirements. The Committee will ensure that a senior leadership succession plan is in place. The Committee has specific responsibility for the review of Bank officer appointments and executive compensation and benefits.

Membership and Meetings

The Board shall appoint the members of the Human Resources Committee and designate its Chairperson. The Committee shall meet as required to conduct necessary business. The Bank's Manager, Human Resources and Administration shall serve as Secretary of the Committee. Written minutes shall be prepared for each meeting by the Secretary, and the approved original forwarded to the Corporate Secretary for filing with the Federal Housing Finance Board and distribution to the full Board of Directors.

Products and Services (Charter - PDF)

Purpose

The Products and Services Committee will have the general responsibility to assist the Board of Directors on matters pertaining to the Bank’s member-facing activities, including all member products and services, new product developments, and sales and marketing strategies. The Committee will also oversee the member products policies, product pricing strategies and collateral practices.

The Committee shall:

• Review and recommend action to the Board of Directors with respect to the Member Products Policies, including -
  • Master Member Credit and Lending Policy
  • Standby Letter of Credit Policy
  • Intermediary Derivative Transaction Policy
  • Mortgage Partnership Finance Policy
  • Collateral Policy
  • Credit Products Pricing Policy
  • Housing Associate Lending Policy
  • Correspondent Banking Services Policy;
• Review reports of management exceptions to and waivers of the Bank’s Member Products Policy;
• Review the development and implementation of new or modifications to member, investment and mission-related products and programs;
• Review and recommend action to the Board with respect to waivers of any prepayment fees or charges due to the Bank related to any member products or services, subject to applicable legal requirements;
• Review product pricing;
• Review regularly reports on the Bank’s membership, Advances portfolio and Mortgage Partnership Finance^® program; and
• Review collateral practices including types of collateral and appropriate haircuts.
  

Membership and Meetings

The Board of Directors shall appoint the members of the Committee and shall designate the Chairperson and Vice Chairperson. The Committee shall meet as necessary to discharge this Committee’s purpose. The Bank’s Group Director of Member Market Access shall serve as the Secretary to this Committee. Written minutes of the Committee will be prepared by the Secretary for each meeting. Detailed minutes of any executive session of the Committee will not be maintained; however, topics discussed will be noted in the written minutes. The approved original minutes will be forwarded to the Corporate Secretary for filing with the Federal Housing Finance Board and distribution to the full Board of Directors