Audit committees, within a nutshell, assure the accuracy and integrity of your economic statements of your organization upon which donors, members, and other persons rely. It is the job of your audit committee to come to be familiar with the economic statements and reports of your nonprofit and ask challenging queries of your accountants, the chief economic officer, and also other men and women involved in preparing them.
Audit committees are the norm amongst bigger nonprofits, but they’re becoming increasingly popular in smaller organizations at the same time. A 2005 survey by the National Urban Institute identified that 20 percent of all nonprofits surveyed had a separate audit committee. Not surprisingly, bigger organizations had been extra probably to possess audit committees than smaller ones. Fifty-eight percent of the bigger organizations (that have revenues with greater than $40 million in annual expenditures) had audit committees. In smaller organizations with annual expenditures of much less than $100,000, only 20 percent reported possessing an audit committee.
Most authorities agree that an audit committee is often a superior practice. It sends the message for your constituency plus the public at substantial that the activities of your nonprofit will normally be truthful and legal.
