The NDC Special Membership Meeting was called to order at 7:10 pm by parliamentarian Bill Jones.
Board president Peter May read a statement to the members regarding the board’s call for the membership to consider the purpose and composition of, and to elect, an audit committee as called for in the by-laws.
Purpose and Composition of Audit Committee
Board member Bill Wilkerson read the board’s handout, proposing the composition and purpose of the audit committee, for membership consideration, as follows:
- The Audit Committee shall serve a three-year term. Terms begin and end upon certification of the election by the Nominations and Elections Committee at the annual meeting. The Audit Committee shall elect a chair. No officer, employee, or director of the Corporation shall be eligible to serve on this Committee.
- The functions of the Audit Committee shall be to review and evaluate:
- the financial statements and audit reports of the Corporation and its manager;
- the corporation’s accounting system, accounting procedures, operating budget, and allocation of costs under the provisions of the By-Laws and Management Agreement;
- adherence of the board and manager to the Management Agreement;
- conformance of the board with the policies established by the board and the bylaws, and the various operations of the Corporation (such as the cafe), in order to determine the board’s effectiveness in administering the affairs of the Corporation economically and efficiently.
- The Audit Committee may make such reports and recommendations to the Board of Directors and to the membership of the Corporation as it may deem appropriate, and shall make an annual report to the membership of the Corporation concerning its findings, and its operations throughout the year. Reports to the membership other than at the regular annual meeting of the members of the Corporation shall be e-mailed to members per the procedures established in the by-laws no later than thirty days after presentation to the secretary of the Corporation.
- Members of the Audit Committee shall have the right to attend all regular and special meetings of the Board of Directors, including executive sessions, and shall be furnished with copies of all minutes. They shall also be given access to all books and records of the Corporation. The Audit Committee shall have the right to consult with the Corporation attorneys and auditors.
- The members of the Audit Committee shall remain impartial and shall keep those matters subject to executive session confidential to the extent that the by-laws provide.”
During discussion the following points were made:
Composition – A three member committee is the norm for most corporations across the county. GHI’s three member audit committee has worked well. More members would provide more diversity. It might be difficult to find enough members to run for a five member committee.
It was moved by Maria Silvia Miller and seconded by Craig Tooley that the audit committee be composed of three (3) members. The motion was approved by the membership.
- Independent Investigations – The individual members of the committee should not have the authority to initiate any independent investigations without a positive vote of the committee. The committee will come to all meetings and can observe the approval of contracts. The financial records of the corporation are open for inspection of all members by appointment. One of the audit committee’s objectives is to follow how the management agreement is being carried out.
- Authority of Audit Committee and Board – The creation of an audit committee does not limit the board’s responsibility to make policy and management decisions. The audit committee is an oversight committee. The board has legal and fiduciary responsibilities. The board is ultimately responsible to the membership. The audit committee can attend regular and executive session meetings of the board. Board meetings with the Manager should be in executive session.
- Other – What is the standard for “evaluation”? The committee can help improve communication between the board and members.
As a result of discussion the following additional modifying motions passed:
- Change the term of audit committee members to one (1) year.
- Retain the provision for the audit committee to be composed of three (3) members.
- Add subsection 2e: including all contracts and agreements entered into by the cooperative.
- Add subsection 2f: all other matters brought up by the audit committee
- Add subsection 2g: concerns brought up to the committee by cooperative members.
- Add new section 3: The Audit Committee’s authority to request information and conduct investigations shall be based on a majority vote of the committee.
- Add new section 7: Nothing in these purposes shall limit the board’s responsibility to make policy and management decisions n behalf of the membership.
It was moved and seconded to approve the modified proposal with the addition of subsections 2e – g and new section 7. The motion was approved by the membership.
Election of Audit Committee
The by-laws provide that the audit committee is one of three committees directly elected by the membership. Five candidates were nominated: Joan Whelan, Richard McMullen, Dorian Winterfeld, Michael Hartman, and Ed James. Three candidates were elected by the membership to the audit committee: Dorian Winterfeld, Michael Hartman, and Ed James.
Notification of Membership (For Meetings and Other Matters)
Secretary Bill Wilkerson reminded the members that the by-laws specify that members are to be notified by email and to give email addresses (or any changed email addresses) to the secretary. Notices will also be posted on the New Deal Cafe list serve which is only for official announcements and notices. Notices are also posted at the cafe. Those without email can request copies be mailed. The Friends of the New Deal Cafe listserve is the place to post general discussion about the cooperative.
Bill Wilkerson, Secretary
The minutes of the Special Membership Meeting on June 29, 2009 were approved by the board of directors at its regular meeting on October 21, 2009.