Following about two years of planning, the Town of New Canaan finally will have its first audit committee.

The Town Council voted May 21 to create the new committee, which will assist the town in dealing with financial statements and annual audits, among other roles.

The vote had been postponed at a March 27 meeting at the request of Board of Education members, who called the committee's proposed ordinance "overbroad." Board members also said they had not been included in the discussions prior to that meeting.

After the board weighed in, only one section of the ordinance was changed. Section 62-4d states that the committee will have the power "to investigate any matters directly related to" its purposes, "on its own motion or brought to its attention with full access to all books, records (except such records that are confidential under state or federal law), facilities and personnel of the town and Board of Education." Board members were concerned that the new committee would have access to confidential records, such as students' and teachers' personal information, medical files and collective bargaining records and reports. Hazel Hobbs, the board's chairman, has noted that the board is governed by the state and must comply with the Family Educational Rights and Privacy Act.

The committee will include three regular members who are "financial experts," according to the ordinance.

The Board of Selectmen will appoint the three members, as well as two alternates, who will each serve three-year terms and no more than three consecutive terms. The Town Council is required to confirm the appointments.

Last week's vote was not approved without discussion, however. Councilman Roger Williams took issue with the word "directly" in Section 62-4d, which calls for the committee to investigate matters directly related to its purposes. Williams said the word could "limit the authority of this audit committee."

"We've wanted this for a long time," he said. "We've seen instance after instance in town government where we should've had an audit committee ... So let's set it up the right way. Don't do it in a way that's potentially going to handicap us."

Steve Karl, co-chairman of the Town Council's bylaws and ordinance subcommittee, said keeping the word "directly" would help the new committee stay focused.

"The subcommittee discussed the language at length and changed it several times," Karl said.

A motion to strike the word "directly" did not pass.

Committee members will have no compensation and should not serve on any other office or committees of the town government, according to the ordinance.

Another instance the Board of Education had an issue with remains in the ordinance. Board members were worried that they could incur expenses if the committee decides to call the district's legal team to attend meetings. The audit committee will have the power "to request any officer or employee of the Town and Board of Education, the Town's and Board of Education's legal counsel, internal auditor, independent auditors or other consultants to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee," according to the ordinance.

Some of the committee's duties include assisting the town departments with their financial reporting processes, the annual independent audit of the town's financial statements, compliance with legal and regulatory requirements that could impact the town's financial statements, and overseeing the town's plan for corrective action "which should include appropriate and timely follow-up measures."

In addition, the committee shall meet with the independent auditors during the annual review period to discuss the audit plan and the town's annual financial statements. Based on such review and discussion, the committee will determine "whether to recommend to the Town Council the adoption of the audited financial statements."

The audit committee may also make recommendations to the town departments regarding the annual audited financial statements, financial management policies, among other areas.

First Selectman Robert Mallozzi said he hopes to make the appointments within a month., 203-330-6582, @olivnelson