EXHIBIT 99.1
CCFNB BANCORP, INC.
COLUMBIA COUNTY FARMERS NATIONAL BANK
CHARTER OF THE AUDIT COMMITTEE
AS OF MAY 11, 2006
OBJECTIVE
The objective of the Audit Committee is to assist the full Board of Directors in
fulfilling its fiduciary responsibilities. The Audit Committee is responsible
for evaluating the Bank's compliance with laws, regulations, policies and
procedures, and determining that the Bank has adequate administrative, operating
and internal accounting controls. In addition, the Audit Committee is
responsible for providing reasonable assurance regarding the integrity of
financial and other data used by the Board of Directors.
RESPONSIBILITIES
The Audit Committee is responsible for:
- Reviewing published Bank financial statements and the annual Report
for accuracy, timeliness, and appropriate financial statement
disclosures.
- Reviewing the adequacy and effectiveness of key accounting and
financial policies, including any significant changes thereto.
- Evaluating security for computer systems, facilities, and backup
systems.
- Determining that no restrictions are imposed upon the audit scope that
would hinder independence of the audit function.
- Evaluating responses by management to audit findings and reports.
- Monitoring management implementation of audit recommendations.
- Assessing the impact of new accounting principles or policies
promulgated by the accounting profession or proposed by Bank
personnel.
- Overseeing the investigation of conflicts of interest and unethical
conduct.
- Facilitating communication among the Board of Directors, the Bank's
external auditors, internal auditors, the Office of the Comptroller of
the Currency and the Federal Reserve System.
- Reviewing and approving annual audit plans of the external and
internal auditors.
- Ensuring the receipt from the external and internal auditors of a
formal written statement delineating all relationships between the
auditor and the Bank. Also, actively engages in a dialogue with the
auditor with response to any disclosed relationships or services that
may impact the objectivity and independence of the auditor, and to
take appropriate action to ensure the independence of the outside
auditors.
- Requiring the external and internal auditor to discuss with the audit
committee the auditors judgments about the quality, not just
acceptability, of the Bank's accounting principles applied in its
financial reporting. Also, recommends that outside auditors discuss
the clarity of the company's disclosures.
- Requiring a disclosure to shareholders to disclose whether the audit
committee:
1. discussed with management the quality of the accounting
principles and significant judgments affecting the company's
financial statements;
2. discussed with the outside and internal auditor the auditors
assessment of the quality of management's accounting principles
and judgments;
3. discussed among themselves, without the presence of management or
the outside or internal auditor, the information from (1) and
(2); and
4. believes that the company's financial statements are fairly
presented in conformity with GAAP.
The above responsibilities of the Audit Committee will be discharged through
review of audit reports and discussions with external auditors, as well as Bank
management.
ADMINISTRATIVE
- The Audit Committee will consist of at least two Board members and a
Chairperson designated by the Board. The process of appointing members
to the Audit Committee will provide a level of service continuity.
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- Each committee member shall be independent according to the specified
criteria in Section 301 of the Sarbanes-Oxley Act of 2002.
- The Audit Committee members will be directly responsible for the
appointment, compensation, retention, and oversight of the issuer's
outside and internal auditors, and the outside and internal auditors
must report directly to the Audit Committee.
- The Audit Committee will establish procedures for handling anonymous
complaints regarding accounting, internal controls and auditing
matters.
- The Audit Committee will have the authority to engage independent
counsel and other advisors.
- CCFNB will provide appropriate funding for the Audit Committee.
- The Audit Committee will meet at least four times a year and will have
the opportunity to meet in executive session with external and
internal auditors at least annually. Furthermore, the Committee has
the authority to call additional meetings and has the ability to
communicate with Senior Management between regularly scheduled
meetings, as deemed necessary.
- Written minutes shall be prepared for each meeting and distributed to
the full Board of Directors.
- Require disclosure to shareholders of whether the Audit Committee has
adopted a written charter, and if so, whether the committee has
satisfied its responsibilities during the prior year in compliance
with the charter. The charter should be disclosed at least triennially
in the annual report and in the next annual report after any
significant amendments are made to the charter.
- This charter will be reviewed and approved at least annually by the
Audit Committee. The Audit Committee Charter also will be reviewed and
approved by the Board of Directors on an annual basis.
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