What is the role of the audit committee? Do we need one?

The audit function, for those nonprofits that are required to have an independent audit, should be overseen by the board of directors, however, the full board is not needed to do so. Many organizations find that it is most efficient to have a small audit committee in place to recommend the hiring and conduct the review of the outside auditor’s performance and to serve as the liaison between the auditor and staff who run the nonprofit’s finances day-to-day. The intermediary function of the audit committee is critical for providing an independent review of the nonprofit’s financial procedures, to ensure that prudent policies are in place and being followed, and that the personnel involved are competent and providing accurate reports on a timely basis to the board and the outside auditor.