Audit Committee Charter
The Audit Committee (“the Committee”) assists the board in fulfilling its oversight responsibilities with respect to
- the audit of the organization’s books and records; and
- the system of internal controls that the organization has established.
The Committee should have a clear understanding with the outside auditors that they must maintain an open and transparent relationship with the Committee and that the ultimate accountability of the outside auditors is to the board and Committee.
Responsibilities
The Committee’s responsibilities include, but are not limited to, the following:
- Recommending to the board the selection, retention, or termination of the outside auditor
- Conducting periodically, and at least every five years, a documented evaluation process of the outside auditors’ performance to determine whether to continue engagement with the firm, or to conduct a request-for-proposal process to identify and recommend a new provider
- Reviewing the scope, fee, and general extent of the outside auditors’ annual audit
- The Committee’s review should include an explanation from the outside auditors of the factors considered by the accountants in determining the audit scope, including the major risk factors.
- The outside auditors should confirm with the Committee that no limitations have been placed on the scope or nature of their audit procedures.
- Reviewing with the chief operating officer (COO) and outside auditors the organization’s accounting and financial reporting controls
- Annually obtaining written letters from outside auditors regarding the adequacy of the organization’s accounting and financial reporting controls;
- Reviewing with the COO and outside auditors significant accounting and reporting principles, practices, and procedures applied by the organization in preparing its financial statements
- Discussing with the outside auditors their judgments about the quality—not just the acceptability—of the organization’s accounting principles used in financial reporting
- Inquiring as to the independence of the outside auditors and, at least on an annual basis, obtain from the outside auditors formal written statements delineating all relationships between the outside auditors and PEAK Grantmaking, including other consulting work being performed by the outside auditors for the organization
- Coordinating with staff in conducting an annual review of conflict of interest statements
At the completion of the annual audit, review the following items with the president and CEO and the outside auditors:
- results of the audit of the financial statements and the related report therein and, if applicable, a report on changes during the year in accounting principles and their application;
- significant changes to the audit plan, if any, and serious disputes or difficulties the president and CEO and COO encountered during the audit;
- whether the outside auditors received cooperation during their audit, including access to all requested records, data, and information;
- whether the outside auditors had any disagreements with the executive director that, if left unresolved, could have caused them to issue a nonstandard report on the organization’s financial statements;
- other communications as required to be conveyed by the outside auditors by current Accounting Standards relating to the conduct of the audit;
- the management letter and any “material” or “serious” recommendations that the outside auditors may have; and
- the executive director’s response to the letter and decide if any additional follow-up is needed.
Authority
Subject to the prior approval of the board, the Committee is granted the authority to investigate any matter or activity involving financial accounting and financial reporting, as well as the organization’s internal controls. In that regard, the Committee will have access to the organization’s external professionals to render advice and counsel in such matters
Structure
The Audit Committee is a standing committee of the PEAK Grantmaking Board. The Committee may form subcommittees to work on specific tasks, but all subcommittee decisions or recommendations by subcommittees shall be presented to the full Committee before being put before the board.
Composition
The Committee has a chair or two cochairs appointed by the Governance Committee. The chair or cochairs must be sitting board members and serve a two-year term. Committee members are appointed by the Governance Committee and may be board or non-board members. Board members on the committee serve a three-year term, coinciding with their board term. Non-board members serve a one-year, renewable term. The Committee does not have a set number of members required; however it is desirable to have between three and five members.
Meetings
The Committee will meet on an as-needed basis. In addition, the Committee will meet in an executive session with the outside auditors at least once annually and at other times when considered appropriate.
Staff Liaison
The chief operating officer will serve as the staff liaison to the Committee to facilitate its work.