Charge of the AAHD Audit Committee

The Audit Committee is appointed by the President under direction of the Board and has responsibility for: 

  1. Monitoring the integrity of the financial statements and internal financial controls of the AAHD via the audit process. 
  2. Oversight of the AAHDs external auditors. 
  3. Mediation of disagreements between management and the auditors regarding financial reporting. 
  4. The determination of the independence of the external auditors.

The Audit Committee should be fully independent. “Independent” means that none of the members of the Audit Committee are part of the management team, and the Committee is free to act in its oversight functions throughout the organization without undue outside influence or coercion.

The Audit Committee may be composed of two to three members:

  • One member serves as chair as appointed by the President.
  • One member should have expertise to serve as the financial and accounting expert on the committee. 
  • One member should be knowledgeable about AAHD structure and functions and in the areas of internal controls, compliance, ethics, and management. 

The Executive Director; and AAHD Secretary/Treasurer shall serve as consultants to this Committee and be present at each meeting as directed by the chair. 

The Audit Committee may request any officer or employee of the AAHD or the AAHD’s outside counsel or external auditor to attend a meeting of the committee or to meet with any member of, or consultant to, the committee. However, any needs of the committee that would result in financial obligation to the AAHD outside of that which is already budgeted to this committee would have to be reviewed and accepted by the Board or Executive Committee prior to the obligation. The Audit Committee may seek any information it requires from employees of the AAHD – all of whom are directed to cooperate with the committee’s requests. 

The Audit Committee shall report directly to the AAHD Board or at the Annual Business Meeting.

Responsibilities of the Audit Committee include: 

  1. Review and reassess the adequacy of this Charge bi-annually and recommend any proposed changes to the Board for approval. 
  2. Review the annual audited financial statements with the Board, including major issues regarding accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect the AAHD’s financial statements. 
  3. Review major changes to the AAHD’s auditing and accounting principles and practices as suggested by the external auditing firm or management. 
  4. Direct the appointment of the external auditor, which is ultimately accountable to the Audit Committee. 
  5. Approve the fees to be paid to the external auditor subject to Board approval. 
  6. Approve the annual Audit Scope. 
  7. Review with the external auditor, any problems, or difficulties the auditor may have encountered, and any management letter provided by the auditor and the AAHD’s response to that letter. Such review should include:
    1. Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information 
    2. Any disagreements between management and the external auditors that need to be mediated by the Audit Committee. 
  8. Pre-approve services to be performed by the AAHD’s external auditors. The responsibilities of pre-approval may be designated to one member of the Audit Committee who, after giving such pre-approval, must report to the full committee.
  9. Review any and all reports issued by the external auditors, with respect to the AAHD’s financial statement and critical accounting policies 
  10. Receive updates from management and AAHD legal counsel regarding compliance matters and/or any significant risks or exposures facing the organization. 
  11. Establish a process for receiving, processing, tracking, communicating, and investigating reports of concerns regarding questionable accounting, internal controls, audit matters or fraud.
  12. Review with each public accounting firm that performs an audit: 
    1. All critical accounting policies and practices used by the organization 
    2. All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management of the organization, the ramifications of each alternative, and the treatment preferred by the organization. 
  13. Inquire of the Executive Director and Chief Financial Officer regarding the sources of support and revenue of the organization from a subjective as well as an objective standpoint. 
  14. Review with management the policies and procedures with respect to officers, key employees (Executive Director, and Chief Financial Officer), disqualified persons as defined by the IRS, expense accounts, and perks, including excess benefit transactions. 
  15. Conduct executive sessions with the outside auditors on an annual basis and with the Executive Director, Chief Financial Officer or legal counsel as desired by the committee. 

While the Audit Committee has the responsibilities and powers set forth in this Charge, it is the duty of the Audit Committee to plan or conduct audits or to determine that AAHD’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is also the responsibility of management and the independent auditor. 

Approved by the Board of the AAHD, January 23, 2024.