A 2012 Agenda for Nonprofit Audit Committees
By: Eugene Fram
Nonprofit audit committee members might want to view a video presentation at the Corporate Board Member Website (June 9th) for a list of top issues being faced by for-profit audit committees. Catherine Bromillow, PwC Center for Board Governance, presents the list.
Following, in her order of importance (high to low), are those that I feel can apply to nonprofit organizations.
RISK MANAGEMENT – Focusing on the known risks and estimating the unknown ones. For example, how will the greater use of psychiatric drugs impact nonprofit counseling organizations?
INCREASED USE BY REGULATORS – What use will the IRS make of the governance information now being collected annually via the expanded 990 Forms? Do volunteer directors know the potential impact of the Intermediate Sanctions Act?
CHANGES IN REGULATIONS & ACCOUNTING STANDARDS – What impact, if any, will Dodd-Frank have on nonprofits? (Although not directed to nonprofits, Sarbanes-Oxley has had some indirect impacts.) What changes in accounting standards need to be reviewed by a nonprofit audit committee?
TURBULENT ECONOMIC CONDITIONS – What plans are in place to survive more turbulence in the world economy?
INTERNAL CONTROL STRUCTURE – How does the internal control structure need to be changed after a merger or acquisition transaction between two nonprofits?
TAX COMPLEXITY- How do changes in state or federal tax regulations impact a nonprofit organization’s business plan?
OPERATION COMPLEXITY – For those nonprofits that operate from multiple sites, the audit committee needs to understand key issues for each site. Visits to all sites by the committee or individual directors are important.
COMMITTEE EFFECTIVENESS – With frequent rotating membership, how do nonprofit audit committees go about improving their operations?
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