Audit committee charter
=======================

Audit committee charter: [ORGANIZATION NAME]

Approved by the board on: [DATE]

Next review: [DATE]

1. Purpose

The audit committee helps the board oversee [ORGANIZATION NAME]'s financial reporting, internal controls and independent audit, so that the board, donors, funders and regulators can rely on its financial statements.

2. Members

1. The committee has [NUMBER] members, appointed by the board each year at [MEETING].
2. Members are [INDEPENDENT DIRECTORS / DIRECTORS AND OTHER PEOPLE THE BOARD APPOINTS, IF STATE LAW ALLOWS], as defined in [OUR CONFLICT OF INTEREST POLICY / STATE LAW].
3. The following may not serve: staff members; the [PRESIDENT OR CHIEF EXECUTIVE]; the [TREASURER OR CHIEF FINANCIAL OFFICER]; [ANY OTHERS YOUR STATE OR BOARD EXCLUDES].
4. Members of the finance committee may serve but may not make up [HALF OR MORE] of the committee, and may not chair it. [KEEP OR ADJUST TO MATCH YOUR STATE.]
5. At least one member should have experience reading financial statements.
6. The board names the chair: [NAME OR ROLE].

3. Meetings

1. The committee meets at least [NUMBER] times a year, including before the audit begins and when the draft audit is ready.
2. A quorum is [NUMBER] members. Only members who meet the independence requirements take part in deliberations and votes on audit matters; others may give background information or answer questions first.
3. The committee meets with the auditor at least once a year without staff present.
4. Minutes are kept and shared with the board.

4. Duties: the auditor

1. Recommend to the board the hiring, renewal or replacement of the independent auditor, and negotiate the auditor's fee for the board's approval.
2. Approve in advance any non-audit services by the audit firm, and check they don't affect its independence.
3. Each year, consider the auditor's performance and independence.

5. Duties: before the audit

1. Review the audit's scope, timetable and planning with the auditor.
2. Confirm that staff will give the auditor full access to records and people.

6. Duties: after the audit

1. Review the draft audited financial statements and any management letter with the auditor.
2. Discuss with the auditor any material risks or weaknesses in internal controls, any limits placed on the auditor's work or access to information, any significant disagreements between the auditor and management, and whether the accounting and financial reporting processes are adequate.
3. Decide whether to accept the audit and recommend it to the board.
4. Agree with management on responses to the management letter, with owners and dates, and follow up on them.

7. Other duties

1. Review the charity's internal controls at least once a year, for example the steps in our [financial controls](/resources/financial-controls) guide.
2. Receive and oversee concerns raised under the [whistleblower policy](/resources/templates/whistleblower-policy) about accounting, controls or audit matters.
3. Check that required filings that depend on the audit, such as state charity reports and the Form 990, are filed on time.
4. [ANY OTHER DUTIES THE BOARD ASSIGNS]

8. Reporting to the board

After each meeting, the chair reports to the board on the committee's work, its recommendations and any concerns. The committee's minutes are part of the board's records.

9. Authority and resources

The committee may ask any officer, staff member or the auditor for information, and may get independent advice at the charity's expense up to $[AMOUNT] without further board approval.

10. Review of this charter

The committee reviews this charter every year and recommends any changes to the board.

| Date reviewed | Changes | Approved by |
|---|---|---|
| [DATE] | [CHANGES, OR "NONE"] | [NAME] |