FEDERAL HOME LOAN BANK OF PITTSBURGH

CHARTER FOR THE AUDIT COMMITTEE

OF THE BOARD OF DIRECTORS

January 2015

Purpose and Authority

The Audit Committee (Committee) is a committee of the Board of Directors (Board) of the

Federal Home Loan Bank of Pittsburgh (Bank) that assists the Board in fulfilling its

responsibilities for general oversight of:

1. The Bank’s financial reporting processes and the audit of the Bank’s financial

statements, including the integrity of the Bank’s financial statements;

2. The Bank’s administrative, operating, and internal accounting controls;

3. The Bank’s compliance with legal and regulatory requirements;

4. The independent auditors’ qualifications and independence; and

5. The performance of the Bank’s internal audit function and independent auditors.

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 the Bank 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. In order to provide continuity and experience, Committee

members shall serve staggered terms. The Chairperson and Vice Chairperson of the Board are

non-voting ex officio members of the Committee who may participate in discussion and debate,

but do not count for quorum requirements.

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:

a. Being employed by the Bank in the current year or any of the past five years;

b. Accepting any compensation from the Bank other than compensation for service as a

Board Director;

c. 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

d. 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.

Meetings and Procedures

The Committee shall convene at least four times each year, with additional meetings as the

Committee deems appropriate. The Committee Chair is responsible for the agenda and

minutes. 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 quarterly with the Chief

Internal Auditor. The Committee shall be given open access to the Bank’s internal auditors,

Board, the Bank executives, and independent auditors, as well as the Bank’s books, records,

facilities, and other personnel. Written minutes of the Committee will be prepared by the

Committee liaisons 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

distribution to the full Board and filing with the Federal Housing Finance Agency (FHFA).

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; 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 on

Form 10-K (Form 10-K) that will indicate that the Committee is governed by a charter, which will

be included as an appendix to the Form 10-K at least once every three years, and that all the

members of the Committee are independent as defined by the FHFA. 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 independent auditors

as required by Public Company Accounting Oversight Board (PCAOB) Rule 3526.

Duties and Responsibilities

Internal Audit:

1. Review and approve the Internal Audit Charter annually.

2. Select, evaluate at least annually, 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 the Board.

3. Provide that the Chief Internal Auditor shall have unrestricted access to the Committee

without the need for any prior management knowledge or approval.

4. Review at least annually the overall scope, qualifications, resources, activities,

organizational structure, and effectiveness of the internal audit function.

5. Review and approve the annual Internal Audit Plan and budget.

6. Oversee the internal audit function by reviewing the scope of audit services required,

including information security, the significant risks and exposures, and the internal

audit activities and findings; including follow-up on findings.

7. Meet in executive session at least quarterly with the Chief Internal Auditor.

Annually and on behalf of the Board, the Committee should review the Bank's Report on

Consistency with the Guidance that must be submitted to the FHFA Chief Accountant by the

Bank no later than June 30 of each year.

Financial Statements:

1. Review the basis for the Bank’s financial statements and the independent 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 the Form 10-K.

4. Review other sections of the Form 10-K 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.

Internal Controls:

1. Ensure that senior management has established and is maintaining an adequate and

effective internal control system within the Bank. This includes the review of the

adequacy of the internal controls including the identification of significant changes to

the internal control system, the resolution of identified material weaknesses and

significant deficiencies, 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 of the Bank’s SOX 404 process.

4. Review the adequacy and effectiveness of the internal controls regarding

information security.

Independent Auditors:

1. Oversee the work of any registered public accounting firm employed by the Bank 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. Review the performance

of the independent auditor annually. 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, subject to any single request involving a fee of $100,000

or higher being circulated to all Committee members for their information and

comment. 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 PCAOB Rule 3526.

5. Discuss with the independent auditors the requirements under Auditing Standard No.

16, “Communications with Audit Committees,” including 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 the

Bank, or any other relationship or services that may impact their objectivity and

independence.

7. Understand the extent of independent auditor review over the security for

computer systems, facilities, and backup systems.

8. Set clear hiring policies for employees or former employees of the independent

auditors, and monitor compliance with such policies.

9. Review with management and the independent auditors:

·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;”

·The results of the independent auditors’ audit and the independent

auditors’ opinion on the annual financial statements;

·Changes in accounting principles or application thereof, significant judgment

areas, and significant and complex transactions; and

·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.

10. At least annually, obtain from and review a report by the independent 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 address such issues.

11. Provide that the independent auditor shall have unrestricted access to the

Committee without the need for any prior management knowledge or approval.

12. Meet in executive session at least annually with the independent auditors.

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. Review the results of significant investigations, examinations, or reviews performed

by regulatory authorities and management’s response.

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. Oversee the Bank’s internal fraud risk assessment and the concerns reporting process.

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.

6. Provide an independent, direct channel of communication between the Board and the

internal and independent auditors.

7. Evaluate the performance of the Committee annually.

8. Bi-annually consider the need for an independent consultant or accounting firm to

conduct an evaluation of one or more accounting policy areas.

Approved by the Board of Directors: December 18, 2014