A Higher Standard
Through the adoption of a code of ethics and the establishment of an audit committee, MOAA’s board of directors makes your association accountable.
By Vice Adm. Norbert R. Ryan Jr., USN-Ret.

In recent years, instances of corporate misbehavior have become, sadly, almost commonplace. A series of such instances prompted Congress in 2002 to pass the Sarbanes-Oxley Act to improve financial reporting, enhance the roles and responsibilities of corporate management and boards, and make these corporate officers and boards more accountable.

While the Sarbanes-Oxley Act is not directly applicable to nonprofit associations, this past year MOAA’s board of directors took two actions to affirm its compliance with the spirit and purposes of Sarbanes-Oxley and its accountability to you, our “shareholders.”

First, the board unanimously adopted its own ethics code (www.moaa.org/about /moaa_bod_ethicscode.asp), which addresses directors’ fiduciary responsibilities, conflicts of interest, gifts and business courtesies, and political activity, among other subjects. Each MOAA director must subscribe in writing to the code, which includes a detailed disclosure form.

The board’s second action dealt with MOAA’s finances. For many years both the association and The Scholarship Fund of MOAA have received “unqualified” — or clean — audits. Nonetheless, the board saw benefit in establishing an audit committee. As a result, my predecessor, Adm. Jerry Johnson, USN-Ret., appointed such a committee and charged it to:

• select and retain auditors each year and ensure MOAA and The Scholarship Fund of MOAA have audited financial statements prepared annually;
• meet with the selected auditors at least annually to review, and approve if warranted, the audited financial statements and receive the auditors’ oral and written comments and findings;
• review and approve, if warranted, management’s action plan to address the auditors’ comments and findings;
• follow the progress of corrective actions taken to address the auditors’ outstanding comments and findings, to ensure their completion;
• provide copies of the audited financial statements to all directors; and
• keep the board of directors apprised of any audit issues.

Upon becoming your chairman, I immediately reappointed this committee.

I’m extremely proud MOAA took these two actions, even though we weren’t required to do so. We acted because we thought it was the right thing to do and because we hold ourselves to the highest standard of behavior and accountability. We wouldn’t have it any other way.