Audit Committee

Purpose

The Audit Committee assists the National Board of Directors (NBD), and the National Executive Committee (NEC), as appropriate, in fulfilling their oversight responsibilities for external financial reporting, risk management, internal control, governance processes, the audit process and the processes for monitoring compliance with laws and regulations and for ensuring that AGA has an ethics program in place and operating.

Authority

The audit committee is empowered to:

  • Recommend to the NEC for its approval the appointment and compensation of the independent public accounting firm employed to conduct the AGA annual financial statement audit. Oversee the work of the independent public accounting firm employed by the organization.
  • Monitor and assist in resolving any disagreements between management and the auditor regarding financial reporting.
  • Be made aware of all actions to obtain auditing services to include use of the independent public accountant conducting the financial statement audit for non-audit services.
  • With prior notification to executive director, national president and/or NEC as appropriate, seek any information it requires from employees — all of whom are directed to cooperate with the committee's requests. Meet with the NBD, NEC, executive management, external auditors or counsel as necessary. In cases where external counsel advice is consulted and will result in a cost to the association, prior notification will be made to the executive director, national treasurer or national president as applicable.
  • In coordination with the Ethics Committee as appropriate, determine audit committee’s process for special investigations (e.g., whistleblower allegation, antifraud compliance, discovery of error, illegal acts), notifying executive director, NEC and/or counsel as appropriate, depending on the nature and scope of the investigation.

Composition

The national president shall, in consultation with the national president-elect, appoint the members of the audit committee. The audit committee shall be comprised of five members. At least three of the five members shall be a Certified Government Financial Manager (CGFM), Certified Public Accountant (CPA) or Certified Internal Auditor (CIA) and at least three of the five members shall be members of AGA. The members of the audit committee shall elect a member to serve as chair, a member to serve as vice-chair with authority to act in the absence of the chair and a member to serve as secretary responsible for preparing minutes of each called meeting, as well as two general members of the committee. All audit committee appointments shall be ratified by the National Executive Committee.

The audit committee members shall be appointed to three-year terms. Members may be reappointed for an additional three-year term. Terms of membership will be staggered to facilitate transition and provide for continuity of knowledge and experience Members are not eligible to serve more than two full terms on the Audit Committee.

Meetings

The audit committee shall meet at least twice annually, with authority to convene additional meetings as circumstances require. All committee members are expected to attend each meeting in person or via audio- or video-conference. The committee shall meet at least annually with management and the independent auditors. The committee may invite members of management, auditors or others to attend meetings and provide pertinent information as necessary. It may hold private meetings with auditors and executive sessions. Agendas for called meetings will be prepared and provided in advance to members, along with appropriate briefing materials. Minutes will be prepared for all called meetings.

Responsibilities

The committee will carry out the following responsibilities:

External financial reporting
  • Review significant accounting and reporting issues, including complex or unusual transactions and highly judgmental areas, and recent professional and regulatory pronouncements, and understand their impact on the annual financial statements.
  • Review with management and the external auditors the results of the audit, including any difficulties encountered.
  • Review the annual financial statements, and consider whether they are complete, consistent with information known to committee members, and reflect appropriate accounting principles.
  • Review other sections of the annual report and related required filings (to include IRS Form 990) before release and consider the accuracy and completeness of the information.
  • Review with management and the external auditors all matters required to be communicated to the committee under generally accepted auditing standards and government auditing standards.
Internal control
  • Consider the effectiveness of the association’s internal control system, including information technology security and control.
  • Understand the scope of any association committee’s and external auditor’s review of internal control over financial reporting and obtain reports on significant findings and recommendations together with management's responses.
  • Assess follow-up procedures to obtain independent assurance that all internal control issues and management letter comments are addressed and resolved.

Association internal reviews 

  • Review the results of internal reviews related to the areas of external financial reporting, risk management, internal control, governance processes, the audit process and the processes for monitoring compliance with laws and regulations to determine the appropriateness of management’s response and actions taken to address/resolve any such review findings and recommendations.
External audit
  • Review the external auditors' proposed audit scope and approach.
  • Review and confirm the independence of the external auditors by obtaining statements from the auditors on relationships between the auditors and the association, including non-audit services, and discussing the relationships with the auditors.
  • On an as-needed basis, meet separately with the external auditors to discuss any matters that the committee or auditors believe should be discussed privately.
  • Review the performance of the external auditors and, as warranted, recommend for NEC final approval the discharge of the auditors.
Compliance
  • Review the system for monitoring compliance with laws and regulations and the results of management's investigation and follow-up (including disciplinary action) of any instances of noncompliance.
  • Review the findings of any examinations by regulatory agencies and any auditor observations.
  • Review the process for communicating the code of conduct and ethics policies to association personnel, the NEC and all appointed committees and for monitoring compliance therewith.
  • Obtain regular updates from management and association legal counsel regarding compliance matters.
Reporting responsibilities
  • Annually report to the NEC and NBD as needed about committee activities, issues and related recommendations.
  • Provide an open avenue of communication between the external auditors and the NBD and NEC as is required to execute the responsibilities of the committee.
  • Review any other reports the association issues that significantly relate to committee responsibilities.
Other responsibilities
  • Perform other activities related to this charter as requested by the NBD or NEC.
  • Institute and/or monitor any special investigations and occurrences of fraud as needed, notifying the executive director, the NEC, the national president, the Ethics Committee, the Governance Committee, association counsel and/or law enforcement as appropriate.
  • Review and assess the adequacy of the committee charter annually, requesting NEC approval for proposed changes, and ensure appropriate disclosure as may be required by law or regulation.
  • Obtain from the appropriate parties copies of agendas and minutes from meetings of the NBD, the NEC, th eFinance and Budget Committee, the Ethics Committee and the Governance Committee.
  • Confirm annually that all responsibilities outlined in this charter have been carried out.
  • Evaluate the Audit Committee's and individual members' performance on a regular basis.