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Blackhawk Evangelical Free Church

By Tom Bennett,2014-05-15 11:10
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Blackhawk Evangelical Free Church

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NON-PROFIT AUDIT COMMITTEE CHARTER

    Audit Committee Charter

    Page 2 of 5

Audit Committee Role

The committee’s role is to act on behalf of the Board of Directors and oversee all material

    aspects of the organization’s financial reporting, control, and audit functions. The audit

    committee’s role includes a particular focus on the qualitative aspects of financial reporting,

    organization processes for the management of risk, and compliance with significant,

    applicable tax, legal, ethical, and regulatory requirements.

Audit Committee Membership

    The committee shall consist of at least three members, amongst whom there is sufficient

    financial expertise to understand and evaluate the financial transactions and internal

    control procedures of the organization.

    The Board of Directors shall make appointments to the audit committee (including the

    appointment of a committee chair). The Board of Directors, as per Article XYZ of the

    organization’s bylaws, must review these appointments annually.

Audit committee members must be independent of and unrelated to any Board Member or

    paid staff member of the organization.

Audit committee members must be independent of and unrelated to any financial

    professional being paid to provide services to the organization.

Audit Committee Operating Principles

The committee shall fulfill its responsibilities within the context of the following overriding

    principles:

    ? Communications. The chair and others on the committee shall, to the extent

    appropriate, maintain an open avenue of contact throughout the year with senior

    management, other committee chairs, and other key committee advisors (external

    auditors, etc.), as applicable, to strengthen the committee’s knowledge of relevant

    current and prospective organizational issues.

    ? Meeting agenda. Committee meeting agendas shall be the responsibility of the

    committee chair, with input from committee members.

    ? Meeting attendees. The committee shall request members of management,

    counsel, and external auditors, as applicable, to participate in committee meetings,

    as necessary, to carry out the committee’s responsibilities. Periodically (at least

    annually), the committee shall meet in private session with only the committee

    Audit Committee Charter

    Page 3 of 5

    members. The chair is responsible for ensuring that minutes are taken at all audit

    committee meetings.

    ? Reporting to the Board of Directors. The committee, through the committee chair,

    shall report periodically to the Board of Directors (as deemed necessary, but at least

    once per year). In addition, a brief annual report of audit team activities shall be

    prepared by the committee and submitted to the Board of Directors.

Committee Responsibilities

Financial Reporting

    The audit committee shall:

    ? Review and assess the financial statements before they are released to the public

    or filed with funders or regulators.

    ? Review and assess the key financial statement issues and risks, their impact or

    potential effect on reporting financial information, the processes used by

    management to address such matters, related auditors’ views, and the basis for

    audit conclusions.

    ? Approve changes in important accounting principles and the application thereof in

    both interim and annual financial reports.

    ? Advise financial management and the external auditors that they are expected to

    provide a timely analysis of significant current financial reporting issues and

    practices.

    ? Review the management letter and review management’s response to the

    management letter.

Risks and Controls

     The audit committee shall:

    ? Review and assess the organization’s operating and financial risk management

    process, including the adequacy of the overall control environment and controls in

    selected areas representing significant risk.

    ? Review and assess the organization’s system of internal controls for detecting

    accounting and financial reporting errors, fraud and defalcations, and

    Audit Committee Charter

    Page 4 of 5

    noncompliance with the organization’s code of conduct.

    ? Implement and oversee administration of the organization’s confidentiality and conflict of

    interest policy, including the review and approval of significant conflicts of interest and

    related party transactions.

? Implement and oversee administration of a procedure for the confidential,

    anonymous submission by organization employees of concerns regarding

    questionable financial, accounting, or auditing matters.

    External Auditors

     The audit committee shall:

? Engage external auditors, as required in Article XYZ of the organization’s bylaws.

? Review the performance of the external auditors.

    ? Discuss with the auditors any relationships or non-audit services that may affect their

    objectivity or independence.

    ? Consider, in consultation with the external auditors, their audit scopes and plans to

    ensure completeness of coverage, reduction of redundant efforts, and the effective

    use of audit resource.

? Review and approve requests for any consulting services to be performed by the

    external auditors, and be advised of any other study undertaken at the request of

    management that is beyond the scope of the audit engagement letter.

? Review with management and the external auditors the results of the audits and

    related comments in consultation with other committees as deemed appropriate,

    including any difficulties or disputes with management, any significant changes in

    the audit plans, the rationale behind adoptions and changes in accounting principles,

    and accounting estimates requiring significant judgments.

    Audit Committee Charter

    Page 5 of 5

Internal Auditors

    ? The audit committee shall serve as the internal auditors for the organization.

    ? Areas of interest to be audited from time to time by the audit committee shall include,

    but not be limited to:

    1. Vacation/Sick leave accruals and usage, including the process, forms, reporting and

    accounting.

    2. 403(B) contributions including eligibility and amounts.

    3. Expense account audit including types of expenses for office, travel/meetings, and

    mileage reimbursement including process, forms and accounting.

    4. Cash collections procedures including the weekly counting process, recording and

    transportation to the bank.

    5. Fringe benefit analysis to ensure appropriate allocation as defined in the Fringe Benefit

    Policy.

    6. Tax-related issues such as treatment of taxes from unrelated business.

Other

    ? The audit committee shall review and update this charter as necessary. Approval of

    any changes must be granted by the Board of Directors.

This charter approved by the Non-Profit Board of Directors on _______________

___________________________

    John Doe, Board President

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