Financial Accountability in Charitable Organizations: Mandating an Audit Committee Function

In recent years, the public image of charitable organizations has been harmed by highly publicized cases of executive theft of charitable assets. While the federal government has responded by requiring public disclosure of financial information and by imposing intermediate sanctions on insiders receiving excessive benefits, the best place to detect or prevent theft of charitable assets is at the board level. In many cases, charitable organizations could have prevented theft of assets by ensuring that standard procedures, designed to prevent and detect such thefts, were in place. This Note argues that placing responsibility at the board level by requiring charitable organizations to have properly functioning audit committees is the best way to prevent theft and restore public confidence in charitable organizations