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Nonprofit Board Members: Are You Aware of the California Nonprofit Integrity Act?

Charities in California face many rules that are enforced by the Attorney General.

The California Nonprofit Integrity Act provisions include:

·         Charities must have their governing board or authorized board committee review and approve the compensation of the Chief Executive Officer or President, and the compensation of the Chief Financial Officer or treasurer, to ensure that the payment is “just and reasonable.”

·         Charitable corporations with gross revenues of $2 million or more must prepare annual financial statements audited by an independent CPA within 9 months of year-end.

·         Charities With Gross Revenues Of $2 Million Or More Must Establish And Maintain An Audit Committee. The audit committee may include persons who are not members of the governing board. The audit committee cannot include staff members, the president or chief executive officer, the treasurer or chief financial officer of the organization.

·         If an organization has a finance committee, members of that committee may serve on the audit committee, but cannot comprise 50 percent or more of the audit committee. The chairperson of the audit committee may not be a member of the finance committee.


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Richard Pon CPA, CFP