Finding Text
Condition During our current year audit, we noted that the Organization is not in compliance with its by-laws regarding the governance structure. Specifically: • Only two Directors are currently serving on the Board, whereas the by-laws require seven. • The Board is required to meet quarterly, yet meetings have been held irregularly throughout the year. Questioned Costs N/A Criteria According to the Organization’s by-laws, the Board of Directors shall consist of seven members, and the Board must convene at least once each quarter. Compliance with governing documents is essential for effective oversight and accountability. Cause The Organization has experienced challenges in recruiting and retaining qualified Board members and has not prioritized regular scheduling of Board meetings. Effect of Condition Failure to maintain the required number of Directors and meet regularly may impair the Organization’s ability to provide effective oversight, approve key decisions, and fulfill its fiduciary responsibilities. It also exposes the Organization to governance and compliance risks. Recommendation We recommend that the Organization review and assess the current composition and practices of the Board of Directors. The Organization should either: • Take immediate steps to recruit additional Board members and schedule meetings in accordance with the by-laws; • Amend the by-laws to reflect the Organization’s current operational capacity while still ensuring adequate governance. Doing so will help ensure that the Organization operates with proper oversight, transparency, and alignment with its governing documents.