Integral Systems (ISYS)

Audit Committee

The Audit Committee, which was established in accordance with Section 3(a)(58)(A) of the Exchange Act, engages independent public accountants, reviews with the independent public accountants the plan and results of the audit engagement, reviews the independence of the Company’s public accountants, considers the range of audit and non-audit fees and reviews the adequacy of the Company’s internal accounting controls.

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As of September 30, 2006, the Company’s Audit Committee consisted of Dominic A. Laiti, William Leimkuhler, R. Doss McComas and Mark D. Funston, each of whom was independent within the meaning of applicable rules and regulations. The Audit Committee currently consists of Dominic A. Laiti, William Leimkuhler, and R. Doss McComas, each of whom is independent within the meaning of applicable rules and regulations. The Audit Committee met four times in the fiscal year ended September 30, 2006. The Audit Committee meetings were held concurrently with the meetings of the Board of Directors.

At least one member of the Company’s Audit Committee is a financial expert. The Board of Directors has determined that Dominic Laiti is the “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended. Mr. Laiti has a broad financial background. He was founder, President and Director of Globalink, Inc. (an AMX company), from January 1990 to December 1994. Mr. Laiti was President of Hadron, Inc. from 1979 to 1989; Vice President of Xonics, Inc. from 1972 to 1979; and Vice President of KMS Industries from 1968 to 1972. While serving in these positions, Mr. Laiti supervised individuals responsible for Hadron’s financial statements. He has over 30 years of experience in starting, building, and managing high-technology private and public companies with annual revenues from $2 million to over $120 million.

The Audit Committee also appointed Mr. Laiti as the Audit Committee Chairperson in light of Mark Funston’s resignation from the Board and Audit Committee effective November 10, 2006.

The Board of Directors has adopted a charter for the Audit Committee, a copy of which is presented in Appendix A and is also available on the Company’s website at www.integ.com. For more information regarding the Audit Committee, see “Audit Committee Report”.

AUDIT COMMITTEE

As of September 30, 2006, the Company’s Audit Committee consisted of Dominic A. Laiti, William Leimkuhler, R. Doss McComas and Mark D. Funston, each of whom is independent within the meaning of applicable rules and regulations. The Audit Committee currently consists of Dominic A. Laiti, William Leimkuhler, and R. Doss McComas, each of whom is independent within the meaning of applicable rules and regulations. At least one member of the Company’s Audit Committee is a financial expert. The member serving as the Audit Committee’s financial expert is Dominic Laiti, whose relevant experience is set forth above. The Audit Committee also appointed Mr. Laiti as the Audit Committee Chairperson in light of Mark Funston’s resignation from the Board and Audit Committee effective November 10, 2006.

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Table of Contents

AUDIT COMMITTEE

The Company’s Audit Committee consists of Dominic A. Laiti, R. Doss McComas and Bonnie K. Wachtel, each of whom is independent within the meaning of applicable rules and regulations. At least one member of the Company’s Audit Committee is a financial expert. The member serving as the Audit Committee’s financial expert is Bonnie K. Wachtel, whose relevant experience is set forth above. Ms. Wachtel is considered independent in accordance with Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.