Budget Amendment ID: FY2013-S4-138

GOV 138

MANDATORY AUDIT COMMITTEE FOR CERTAIN PUBLIC CHARITIES

Messrs. Tarr, Knapik and Hedlund moved that the proposed new text be amended by inserting, after section ___, the following new section:-

“SECTION__. Chapter 180 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after section 3A the following section:—

Section 3B. A pubic charity, which received more than $5,000,000 in gross support and revenue during the fiscal year covered by its report, shall establish an audit committee appointed by the board of directors. Members shall be appointed for 5 year staggered terms. The audit committee may include persons who are not members of the board of directors, but no member of the audit committee shall be a member of the staff of the public charity, including the president or chief executive officer and the treasurer or chief financial officer. If the public charity has a preexisting finance committee, it must be separate from the audit committee. Members of the finance committee may serve on the audit committee; provided, however, that the chairperson of the audit committee shall not be a member of the finance committee; and provided further, that members of the finance committee shall constitute less than one-half of the membership of the audit committee. Members of the audit committee shall not receive any compensation for their services on the board in excess of the compensation, if any, received by members of the board of directors and shall not have a material financial interest in any entity doing business with the corporation.

Subject to the supervision of the board of directors, the audit committee shall be responsible for making recommendations to the board of directors relative to the retention and termination of an independent auditor and may negotiate the independent auditor's compensation on behalf of the board of directors. The audit committee shall: confer with the independent auditor to satisfy its members that the financial affairs of the public charity are in order; review and determine whether to accept the audit; ensure that any nonaudit services performed by the auditing firm conform to standards for auditor independence referred to in the first paragraph of this section; and approve the performance of nonaudit services by the auditing firm. If the public charity required to establish audit committee pursuant to this section is under the control of another corporation, the members of the audit committee may be members of the board of directors of the controlling corporation.

The audit committee shall establish procedures for the receipt, retention, and treatment of complaints received by an employee of the public charity regarding questionable accounting practices; internal accounting controls; or auditing matters.

Public charities required to submit a financial statement audited or reviewed by an independent certified public accountant shall be prohibited from retaining or using the same auditor or auditing firm for more than five consecutive years”