THE HARTFORD MUTUAL FUNDS, INC.
THE HARTFORD MUTUAL FUNDS II, INC.
HARTFORD SERIES FUND, INC.
HARTFORD HLS SERIES FUND II, INC.
THE HARTFORD INCOME SHARES FUND, INC.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Sarbanes-Oxley Act of 2002 ("Act")(1) and rules adopted by the Securities
and Exchange Commission ("SEC") ("Rules")(2) require that the Audit Committee
for the above-referenced companies (each a "Fund" and together the "Funds")
pre-approve all audit services and non-audit services provided to the Fund by
its independent accountant ("Auditor"), as well as all non-audit services
provided by the Auditor to the Fund's investment adviser and to affiliates of
the adviser that provide ongoing services to the Fund ("Service Affiliates") if
the services directly impact the Fund's operations and financial reporting.
The following policies and procedures govern the ways in which the Audit
Committee will pre-approve audit and various categories of non-audit services
that the Auditor provides to the Fund and to Service Affiliates. These policies
and procedures do not apply in the case of audit services that the Auditor
provides to Service Affiliates, nor do they apply to services that an audit firm
other than the Auditor provides to such entities.
These policies and procedures comply with the requirements for pre-approval, but
also provide a mechanism by which management of the Fund may request and secure
pre-approval of audit and non-audit services in an orderly manner with minimal
disruption to normal business operations. Pre-approval of non-audit services may
be achieved through a combination of the procedures described in Sections C and
D below.
A. General
1. The Audit Committee must pre-approve all audit services and non-audit
services that the Auditor provides to the Fund.
2. The Audit Committee must pre-approve any engagement of the Auditor to
provide non-audit services to any Service Affiliate during the period of
the Auditor's engagement to
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(1) Pub. L. 107-204, 116 Stat. 745 (2002).
(2) Sec. Act Rel. No. 8183 (Mar. 20, 2003).
provide audit services to the Fund, if the non-audit services to the
Service Affiliate directly impact the Fund's operations and financial
reporting.
B. Pre-Approval of Audit Services to the Fund
1. The Audit Committee shall approve the engagement of an auditor to certify
the Fund's financial statements for each fiscal year (the "Engagement").
The approval of the Engagement shall not be delegated to a Designated
Member. (See Section D below.) In approving the Engagement, the Audit
Committee shall obtain, review and consider sufficient information
concerning the proposed Auditor to enable the Audit Committee to make a
reasonable evaluation of the Auditor's qualifications and independence.
The Audit Committee also shall consider the Auditor's proposed fees for
the engagement, in light of the scope and nature of the audit services
that the Fund will receive.
2. The Audit Committee shall report to the Board of Directors (the "Board")
regarding its approval of the Engagement and of the proposed fees for the
Engagement, and the basis for such approval.
3. Unless otherwise in accordance with applicable law, the Engagement, in any
event, shall require that the Auditor be selected by the vote, cast in
person, of a majority of the members of the Fund's Board who are not
interested persons of the Fund (as defined in Section 2(a)(19) of the
Investment Company Act of 1940) ("Independent Directors").
C. Pre-Approval of Non-Audit Services to the Fund and to Service Affiliates -
by Types of Services
1. The Audit Committee shall pre-approve types of non-audit services to the
Fund and its Service Affiliates pursuant to this Section C.
2. Annually, at such time as the Audit Committee considers the Engagement of
the Auditor, management of the Fund, in consultation with the Auditor,
shall provide to the Audit Committee, for its consideration and action,
the following: (a) a list of those types of non-audit services, if any,
that the Fund may request from the Auditor during the fiscal year; and (b)
a list of those types of non-audit services directly impacting the Fund's
operations and financial reporting that Service Affiliates may request
from the Auditor during the fiscal year.
3. The lists submitted to the Audit Committee shall describe the types of
non-audit services in reasonable detail and shall include an estimated
budget (or budgeted range) of fees where possible and such other
information as the Audit Committee may request.
4. The Audit Committee's pre-approval of the types of non-audit services
submitted pursuant to this Section C shall constitute authorization for
management of the Fund to
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utilize the Auditor for the types of non-audit services so pre-approved,
if needed or desired during the fiscal year.
5. A list of the types of non-audit services pre-approved by the Audit
Committee pursuant to this Section C will be distributed to management of
the Service Affiliates and the appropriate partners of the Auditor.
Periodically, the Auditor will discuss with the Audit Committee those
non-audit services that have been or are being provided pursuant to this
Section C.
D. Pre-Approval of Non-Audit Services to the Fund and to Service Affiliates -
Project-by-Project Basis
1. The Audit Committee also may pre-approve non-audit services on a
project-by-project basis pursuant to this Section D.
2. Management of the Fund, in consultation with the Auditor, may submit
either to the Audit Committee or to the Designated Member, as provided in
this Section D, for their consideration and action, a pre-approval request
identifying one or more non-audit service projects. The request so
submitted shall describe the project or projects in reasonable detail and
shall include an estimated budget (or budgeted range) of fees and such
other information as the Audit Committee or Designated Member shall
request.
3. The Audit Committee, from time to time, may designate one or more of its
members who are Independent Directors (each a "Designated Member") to
consider, on the Audit Committee's behalf, any non-audit services, whether
to the Fund or to any Service Affiliate, that have not been pre-approved
by the Audit Committee. The Designated Member also shall review, on the
Audit Committee's behalf, any proposed material change in the nature or
extent of any non-audit services previously approved. The Fund's
management, in consultation with the Auditor, shall explain why such
non-audit services or material change in non-audit services are necessary
and appropriate and the anticipated costs thereof.
4. The Designated Member will review the requested non-audit services or
proposed material change in such services and will either:
(a) pre-approve, pre-approve subject to conditions, or disapprove any
such requested services, or any proposed material change in
services, whether to the Fund or to a Service Affiliate; or
(b) refer such matter to the full Audit Committee for its consideration
and action.
In considering any requested non-audit services or proposed material
change in such services, the Designated Member shall not authorize
services which would exceed $50,000 in fees for such services.
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5. The Designated Member's pre-approval (or pre-approval subject to
conditions) of the requested non-audit service or proposed material change
in service pursuant to this Section D shall constitute authorization for
the management of the Fund or the Service Affiliate, as the case may be,
to utilize the Auditor for the non-audit services so pre-approved. Any
action by the Designated Member in approving a requested non-audit service
shall be reported to the Audit Committee not later than at its next
scheduled meeting. If the Designated Member does not approve the Auditor
providing the requested non-audit service, the matter may be presented to
the full Audit Committee for its consideration and action.
E. Amendment; Annual Review
1. The Audit Committee may amend these procedures from time to time.
2. These procedures shall be reviewed annually by the Audit Committee.
F. Recordkeeping
1. The Fund shall maintain a written record of all decisions made by the
Audit Committee or by a Designated Member pursuant to these procedures,
together with appropriate supporting material.
2. In connection with the approval of any non-audit service pursuant to the
de minimis exception provided in the Rules, a record shall be made
indicating that each of the conditions for this exception, as set forth in
the Rules, have been satisfied.
3. A copy of these Procedures and of any amendments to these Procedures shall
be maintained and preserved permanently in an easily accessible place. The
written records referred to in paragraphs 1 and 2 of this Section F shall
be maintained and preserved for six years from the end of the fiscal year
in which the actions recorded were taken, for at least the first two years
in an easily accessible location.
G. Prohibited and Conditionally Prohibited Non-Audit Services
The Auditor may not provide (except as described below) any of the
following services to the Fund, the Fund's investment adviser, the Service
Affiliates or any other member of the investment company complex. For
purposes of this policy, "investment company complex" includes: 1) any
entity controlling or controlled by the Fund's investment adviser/sponsor,
2) any other investment adviser under common control with the Fund's
investment adviser/sponsor, and 3) any investment companies advised by any
investment adviser in the investment company complex.
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1. Conditionally Prohibited Non-Audit Services
The following services may be provided if the Fund and the Audit Committee
can reasonably conclude that the result of the service would not be
subject to audit procedures in connection with the audit of the Fund's
financial statements:
- Bookkeeping
- Financial information systems design and implementation
- Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports
- Actuarial services
- Internal audit outsourcing services
2. Prohibited Non-Audit Services
- Management functions or human resources
- Broker or dealer, investment adviser or investment banking services
- Legal services and expert services unrelated to the audit
- Any other service that the Public Company Accounting Oversight Board
determines, by regulation, is prohibited
Approved on August 5, 2003.
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