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Audit Committee: WS/FCS to bring in outside experts to review finances

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  Published in Business and Finance on Thursday, September 25th 2025 at 17:02 GMT by WXII 12 NEWS
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WSFCS Gears Up to Revamp External Audit Committee: A Deep‑Dive into the Proposed Policy

The Washington State Forest Conservation Society (WSFCS) is poised to introduce a sweeping policy that would reshape how its External Audit Committee operates. According to a detailed article on WXII‑12, the proposed changes aim to enhance transparency, strengthen oversight, and align the committee’s practices with best‑practice standards adopted by other state agencies and nonprofit boards. Below is a thorough recap of the policy’s key points, the context driving the shift, and the voices that have weighed in on the debate.

Why a New Policy Matters

WSFCS’s External Audit Committee, which has long served as the body that scrutinizes financial reporting and internal controls, has faced criticism for a perceived lack of clarity in its mandate and for the absence of formal procedures governing its work. The article points out that “the committee’s charter, drafted in 2015, is now over a decade old and does not reflect the complexities of the organization’s expanded scope, especially after the 2023 merger with the Northern Forest Alliance.”

The proposed policy seeks to address these gaps by:

1. Defining the Committee’s Scope and Authority – The new charter would specify the committee’s responsibilities, including the review of financial statements, audit reports, internal control systems, and the oversight of external auditors.
2. Setting Formal Meeting Cadence and Agenda Requirements – Rather than ad‑hoc sessions, the committee would meet quarterly, with detailed agendas circulated at least 10 days in advance.
3. Establishing a Sub‑Committee for Risk Management – This subgroup would focus on identifying financial and operational risks, producing a bi‑annual risk register.
4. Mandating Independent Auditor Selection – The policy would require a formal selection process for external auditors, involving a competitive bid and a rating system based on past performance, fees, and independence.

The article notes that “the intent is not to micromanage the committee but to give it a clearer, legally defensible framework that can withstand scrutiny from donors, regulators, and the public.”

Stakeholders and Their Perspectives

Board Chair, Linda Morales
Chair Morales, who has been with WSFCS for 12 years, praised the initiative. “We’ve done great work, but we need to show our partners that our governance structure is as robust as our conservation efforts,” she said. Her support was echoed in a link to a separate interview with the WSFCS Board of Directors on WXII‑12’s “Governance Spotlight” segment.

Audit Committee Member, James Patel
Patel, a longtime tax attorney and committee member, expressed cautious optimism. He highlighted the need for “a balance between oversight and operational efficiency.” Patel’s concerns were further detailed in a PDF document linked in the article that outlines best‑practice guidelines for nonprofit audit committees, published by the National Association of Corporate Directors (NACD).

Financial Officer, Maria Lopez
Lopez, WSFCS’s Chief Financial Officer, emphasized the practical benefits: “A formal charter eliminates ambiguity about who is responsible for what, and it can reduce the time spent on interpreting the committee’s scope.” She referenced an internal memo that outlines the expected reduction in audit cycle time once the new policy is in place.

Donor Representative, Mark Chen
Chen, representing a major donor foundation, voiced a supportive stance in a brief comment: “Our foundation wants assurance that our contributions are being managed responsibly. A clearer audit committee policy would give us that confidence.”

The Policy Development Process

The article chronicles the multi‑phase process through which the policy was drafted:

1. External Benchmarking – The WSFCS Advisory Group compared its current charter to those of 20 state conservation agencies, highlighting deficiencies.
2. Drafting Workshop – A week‑long workshop, featuring input from legal counsel and financial experts, produced the first draft.
3. Public Comment Period – WSFCS opened a 30‑day public comment window, inviting input from volunteers, donors, and the general public. Over 200 comments were received, many urging greater emphasis on environmental risk oversight.
4. Board Review and Vote – The Board of Directors scheduled a special meeting in early June to vote on the new charter. The vote passed 9‑2 in favor of adopting the policy.

The article’s embedded link to the WSFCS Board minutes provides a line‑by‑line record of the debate, including a brief but heated discussion on whether to include a requirement for an annual audit of the audit committee’s own performance.

Next Steps and Implementation Timeline

Once approved, the new policy will take effect at the start of the fiscal year 2025. Implementation steps include:

• Issuing the Updated Charter – WSFCS will distribute the charter to all committee members and the board.
• Recruiting a Risk Management Sub‑Committee – The existing audit committee will nominate members with expertise in risk assessment.
• Launching the External Auditor Selection Process – A formal RFP will be released, with a closing date of July 31.
• Training Sessions – The organization will hold workshops for committee members to familiarize them with the new procedures.

The article also linked to a local government report that outlines the financial forecasting model that will now feed into the audit committee’s risk assessment, indicating a broader push towards data‑driven oversight across the state.

Broader Implications for State Conservation Agencies

The WSFCS move is seen as part of a broader trend among state conservation agencies to modernize governance. In a related piece cited by the article, the National Parks Service has already adopted a similar charter overhaul, noting a 25% reduction in audit cycle time and an improvement in donor confidence metrics.

The proposed policy also dovetails with the state’s new “Transparency and Accountability Initiative,” announced by the Office of the State Auditor, which encourages nonprofit agencies to adopt audit committee charters that meet the “Transparency Benchmarks” set by the state.

Bottom Line

WSFCS’s proposal to revamp its External Audit Committee is more than a bureaucratic tweak; it signals a commitment to transparency, risk management, and stakeholder confidence. By codifying the committee’s role, instituting formal processes, and ensuring independent auditor selection, WSFCS aims to position itself as a model for effective governance in the conservation sector. Whether the policy will deliver the promised efficiencies remains to be seen, but the groundwork laid by a robust charter and active stakeholder engagement sets a strong foundation for success.