Title Page
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Client / Site
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Location
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Conducted on
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Prepared by
Legal Compliance Audit
Form of Organization
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If a form of organization has not been selected, review and discuss advantages/disadvantages of<br>various forms of organization (e.g., corporation, limited liability company)
Corporations and Governance
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Review Articles/Certificate of Incorporation and Bylaws
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Review Board of Directors committee structure and committee charters
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Review Board of Directors and committee minutes
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Review corporate structure, including affiliates and joint ventures
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Verify that state corporate filings, including annual reports, have been made
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Review whether corporate registration and/or filings should be undertaken in other jurisdictions
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Review governance-related policies, including conflicts and ethics
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Review insurance coverage
Federal Tax Law Compliance
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Tax-exempt status, including IRS determination letter
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Form 990 compliance and preparation for 2010 filing requirements
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Communications with the IRS
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Political campaign activities
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Lobbying
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Unrelated business income
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Related organizations and their activities
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Excess benefit transactions
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Rebuttable presumption
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Automatic excess benefits
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Public vs. private foundation status
Other Federal Regulatory Compliance
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Foreign Corrupt Practices Act
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U.S. trade controls
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Export controls
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Economic sanctions
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Anti-terrorism
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Government grants and contracts
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Lobbying registration and disclosure; Byrd Amendment likely referenced in grants
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Foreign bank accounts
State and Local Tax
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State tax-exempt determination letter and tax filings
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Unrelated business income
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Sales, privilege, excise, franchise taxes
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Employment taxes and workers compensation
Fundraising and Access to Capital
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State fundraising registration and reporting
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Planned gift activities -- charitable gift annuities, split interest trusts
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Internet solicitations
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Federal tax law substantiation requirements
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Access to loans and equity investments, including program related investments
Website and Internet
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Review website; review procedures for content monitoring
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Determine whether domain names infringe on another organization’s trademarks or servicemarks
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Use of trademarks
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Third party content
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Consents for use of content and website links
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Privacy policy and confidential information
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Charitable solicitations
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Compliance with IRS lobbying and political campaign activity rules
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Review policy for links to/from other sites
Intellectual Property
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Verify status of trademarks, trade names, domain names, and copyrights
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Determine whether other proprietary information should be protected
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Review policies and third party agreements relating to non-disclosure of confidential information and ownership of intellectual property created by employees and contractors
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Review procedures for maintaining confidentiality of trade secrets
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Review licenses, contracts and other agreements relating to intellectual property and computer software to which the organization is a party or a third party beneficiary
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Grants likely to have IP provisions that would include provisions re allocation of rights and requirements for protection of rights.
Document Retention Policies
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Should the organization have a retention policy?
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Review existing policy for both hard copy and electronic documents
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Check grants for document retention requirements and then check policy for conformance.
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Verify the existence of a policy against altering, destroying, or concealing documents in the event of an anticipated or known government audit or investigation
Communications
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Review policies re public statements and speaking to the media
Human Resources and Employee Benefits
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Review employee manuals, handbooks and policies
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Review whether individuals are properly classified as employees and independent contractors
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Review compliance with federal requirements for documentation of citizenship of employees
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Review compliance with federal and state laws prohibiting various forms of discrimination
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Review job application form, standard job posting and recruiting materials
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Review employment contracts and letter agreements
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Review procedures and practices for use of temporary workers
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Review procedures and practices for terminating employees
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Review FLSA compliance issues
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Review compliance with Family and Medical Leave Act
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Review existing tax qualified benefit plans
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Review non-qualified deferred compensation plans
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Review fringe benefits
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Review severance plans or policies
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Verify filing of all IRS/DOL forms
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Review recordkeeping for EEO/AAP compliance
Leases
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If organization planning to lease space, guidance on key issues
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If organization has entered into a lease, review to determine compliance with its provisions
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Consider option provisions and dates for exercise
Contracts
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Review significant contracts and schedule notification of contract renewal dates
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Verify compliance with representations and warranties
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Determine policy for internal contract review, external review by counsel, execution of contracts
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Determine whether there are contracts with related parties and whether there was compliance with procedures for disclosing conflicts of interest
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Determine whether there are business relationships not covered by a written agreement
Financial
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Review internal/external audit procedures
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Review management letter for the last three independent audit cycles
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Review internal control procedures
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Review audited financial statements for last three cycles
Lawsuits
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Existing or threatened lawsuits
Legal Barriers
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Legal barriers that affect day-to-day operations
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Consider other legal barriers, including barriers to growth and success
Completion
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Comments/Recommendations
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Full Name and Signature of Auditor
