Bouyed by federal stimulus funds and rising investment markets, the U.S. not-for-profit sector remained resilient and relevant in addressing numerous evolving health and societal challenges heading into 2022. However, the pandemic-driven crises of the last two years and the disruptions they triggered—from accelerating technology transformations to upending long-standing norms of the workforce and philanthropy—have added stress and strain to the organizational risk profile. That pressure is likely to continue given intensifying scrutiny of mission impacts and support utilization; evolving workplace expectations; surging wages and prices; lingering supply chain issues; growing cybersecurity risks; heightened expectations around environmental, social, and governance (ESG) initiatives; greater regulatory complexity; and other factors impacting the global risk environment—including the direction of COVID-19.
Not-for-profit boards and audit committees will again need to recalibrate their risk-driven agendas in 2022. Drawing on our research, insights, and interactions with not-for-profit audit committees and senior administrators, we’ve highlighted several areas to keep in mind as audit committees consider and carry out their 2022 agendas:
- Stay focused on cybersecurity.
- Understand how the organization is managing and reporting on ESG.
- Monitor other emerging risks and industry matters.
- Reinforce the organization’s focus on ethics and compliance.
- Help ensure internal audit is focused on the organization’s critical risks.
- Make the most of the audit committee’s time together.