The audit committee oversees proper external review of ORCID audited financial statements as well as the organization’s risk management, including monitoring the internal control environment. Each member shall be free of any relationship that, in the opinion of the ORCID Board, would interfere with his or her individual exercise of independent judgment.
The audit committee reports directly to the ORCID Board of Directors.
Roles and Responsibilities of the Committee
Specifically, the audit committee performs the following functions, as relevant:
- Recommends to the Board the appointment and replacement of the independent auditor
- Develops and periodically reviews audit-related policies and has a regular process of determining whether it is receiving quality audit services for a fair price based on established policies and regulations
- Meets with the audit firm in executive session to review the audited financial statements, receive the auditor’s comments on the accounting, bookkeeping, and related procedures
- Addresses any issues identified in the required communications (e.g., audit communications letter and draft report) and any management letter from the auditors
- Solicits from the audit firm observations on staff skills, qualifications, and performance related to those audited functions
- Reviews the performance of the auditors, ensuring continued independence
- Reviews the audit plans for the coming year and discusses with the external audit firm and internal auditor(s) (if any)
- Reviews with management, internal auditors (if any), and the external auditor, the internal control process and risk management and mitigation process
- Reports and recommends the results of audit findings to the Board chair, Treasurer, and Executive Director for approval
- Promptly reports to the Board any irregularities discovered in the Corporation’s practices and procedures and recommends to the Board improvements (if any)
- Supplements the Code of Ethics and Whistleblower policies as needed with additional procedures for (a) the receipt, retention, and treatment of complaints about internal controls, or audit or legal matters, and (b) the confidential, anonymous submission of concerns of questionable accounting, or auditing matter, or potential violations of law
- May retain any independent counsel, independent accountants or other professionals it considers appropriate to assist with any investigations
- Oversees the preparation and reviews the IRS Form 990 annually, prior to approval by the Board Chair, Treasurer, and Executive Director and submission by the Treasurer
- Oversees the preparation and submission of and reviews any other federal or state annual financial filings or reports
- Reviews the presentation of the financial information in the annual report before printed
- Conducts private executive sessions at least annually with the external auditors, person conducting the internal audit function, and management
- The committee consists of three to five persons, a majority and at least three of whom must be Board members.
- The committee must include members with basic expertise in financial management; the committee may wish to consult with an independent financial expert on special topics.
- Members of the finance and investment committee(s) (if any) may not serve on this committee.
- The ORCID Executive Director and Treasurer do not serve on the audit committee because they are not independent. No paid staff members may serve on the committee, and committee members shall not receive any consulting, advisor, or other fees from the Corporation.
- The Chair and members of this committee are appointed by the Board. All committee members, excluding the person serving as chair, may serve two consecutive 3-year terms. The Chair is appointed each year. There is no limit to the number of consecutive 1-year terms that the chair may serve.
Meetings and Quorum
The audit committee meets as needed to fulfill its responsibilities but will meet at least twice annually: once to review the audit plan and once to review the audited financial statements and the IRS Form 990 and related documents and approve the audit engagement and special investigations related to fraud, financial irregularities, and internal control failures. Meetings may be conducted in person, by phone, or by video conference. A quorum shall consist of the majority of Committee members, and a vote of the majority of members shall be required to approve a matter. Alternatively, a matter may be approved by unanimous written consent of the members without a meeting. All actions shall be reported to the Board.
Approved by ORCID ’s board of directors on 26 March 2013.