§ 308B.445 Audit Committee

In plain language#

Every 308B cooperative's board must set up an audit committee "to review the financial information and accounting report of the cooperative." ^{P1, § 308B.445} The statute then says:

• Audit by default. The cooperative "shall have the financial information audited for presentation to the members."
• Bylaw exception. An audit is not required if the bylaws allow unaudited financial statements and the statements "clearly state that they are not audited and the difference between the financial statements and audited financial statements that are prepared according to generally accepted accounting procedures."
• Who sits on it. "The directors shall elect members to the audit committee." The committee "shall ensure an independent review of the cooperative's finances and audit."

The unaudited-statements exception does not remove the express audit-committee requirement or its independent-review duty.

How it works in practice#

• The statute makes the exception a bylaw decision. A cooperative that does not plan to pay for an audit needs a bylaw that says so, and must label its statements accordingly. See Write the bylaws and Keep your cooperative in good standing each year.
• The audit committee is a board committee, and the committee rules in § 308B.451 apply: committee members are natural persons who need not be directors (subd. 2), and are treated as directors for the standard-of-conduct, conflict and indemnification sections (subd. 6).
• Financial statements for the last fiscal year must be kept at the principal office under § 308B.245.
• Presentation to members: the annual members' meeting requires officers' reports (§ 308B.511).

Related#

• Committees: § 308B.451 · Records: § 308B.245
• Annual compliance: Keep your cooperative in good standing each year