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Council of Michigan Foundations

By Raymond Baker,2014-05-15 21:13
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Council of Michigan Foundations

    Council of Michigan Foundations’

    AUDIT & FINANCE COMMITTEE CHARTER

    Adopted

1. INTRODUCTION AND PURPOSE

The Council of Michigan Foundations (CMF) is a membership organization of

    foundations and corporate giving programs with a mission to enhance, improve and

    increase philanthropy in the State of Michigan. In order to assure that CMF operates in

    the highest ethical standards, much of the Board's oversight occurs through the standing

    committees of the Board, such as the Audit & Finance Committee. The primary function

    of the Audit & Finance Committee is to assist the Board of Trustees in fulfilling its

    fiduciary responsibilities by overseeing CMF’s financial reporting and public disclosure

    activities. The Audit & Finance Committee's primary duties and responsibilities are to:

    A. Assist Board oversight of (1) the integrity of CMF’s financial statements, (2) CMF’s compliance with legal and regulatory requirements, (3) the independent auditor's

    qualifications and independence, and (4) the performance of the CMF’s independent

    auditors.

The Audit & Finance Committee will fulfill these responsibilities primarily by carrying

    out the activities specified in Section IV of this Charter.

The Audit & Finance Committee, in its capacity as a committee of the Board of Trustees,

    shall be directly responsible for the appointment, compensation, and oversight of the

    work of any independent auditor employed by CMF (including resolution of

    disagreements between management and the auditor regarding financial reporting) for the

    purpose of preparing or issuing an audit report or related work, and each such

    independent auditor shall report directly to the Audit & Finance Committee.

The Audit & Finance Committee shall have the authority to retain, without prior

    permission from the Board or management, special legal, accounting or other consultants

    to advise the Committee, provided the fees for those services are reasonable. CMF shall

    provide for appropriate funding, as determined by the Audit & Finance Committee, in its

    capacity as a committee of the Board of Trustees, for payment of compensation to any

    advisors employed by the Committee.

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II. COMPOSITION

    The members of the Audit & Finance Committee shall be elected by the Board and shall serve for a period of time not to exceed their maximum term as trustee of CMF or its supporting organizations. At a minimum the committee shall consist of four member; one trustee from each supporting organization (Michigan Community Foundations Ventures and the Michigan AIDS Fund) and two trustees from the Council of Michigan Foundations.

A. Independence

    The Audit & Finance Committee shall be comprised of four or more members each of whom shall have been affirmatively determined by the Board to be independent.

B. Financial Literacy and Expertise

    Each member of the Audit & Finance Committee shall be financially literate; as such qualification is interpreted by CMF's Board of Trustees in its business judgment, or must become financially literate within a reasonable period of time after his or her appointment to the Audit & Finance Committee.

III. MEETINGS

    The Audit & Finance Committee shall meet at least three times annually, or more frequently as circumstances dictate. One of those meetings shall focus on review and approval of annual audited financial statements with the independent auditors. A second meeting will focus on reviewing the annual budget.

    A majority of the Audit & Finance Committee members currently holding office constitutes a quorum for the transaction of a business. The Audit & Finance Committee shall take action by the affirmative vote of a majority of committee members present at a duly held meeting.

IV. RESPONSIBILITIES AND DUTIES

    The Audit & Finance Committee shall undertake the following responsibilities and duties.

    A. Retain and terminate the CMF's independent auditors and pre-approve all audit and non-audit services.

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    B. Obtain and review the peer review performed every three years on the independent auditor describing: the firm's internal quality-control procedures.

    C. Discuss the annual audited financial statements with management and the independent auditor.

    D. Periodically review the internal financial statements with management.

E. Review major changes to CMF’s accounting principles and practices, financial

    reporting process, and system of internal controls, as suggested by CMF’s independent auditor or management.

    F. During the annual audit review process consult with the independent auditor, outside the presence of management, about the auditor's judgments about the quality, and not just the acceptability, of CMF's accounting principles as applied to its financial reporting, and CMF's internal controls and the completeness and accuracy of CMF's financial statements.

    G. Review with the independent auditor any audit problems or difficulties and management's response.

H. Report to the Board of Trustees at each Board meeting.

    I. Review the significant findings from supervisory examination reports of state and federal agencies and the corrective action taken by management to such reports as applicable.

J. Qualification

    While the Audit & Finance Committee has the responsibilities and powers set forth in this Charter, it is not the duty or responsibility of the Audit & Finance Committee to plan or conduct audits or to determine that CMF’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. These are the responsibilities of CMF’s management and the independent auditor. While it is not

    the responsibility of the Audit & Finance Committee to conduct investigations or to assure compliance with laws and regulations, the committee is responsible to make sure any non-compliance issues that come to their attention are properly dealt with.

    Audit & Finance Committee serves as liaison between the Board of Trustees and management, and assumes any duties either requested or directed by the Board of Trustees, and provides relevant financial information to the Board members on a timely basis.

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