Exhibit 99
KLAMATH FIRST BANCORP, INC.
Exhibit 99
AUDIT COMMITTEE CHARTER
Mission
The mission of the Audit Committee of the Board of Directors (the "Board") of
Klamath First Bancorp, Inc., (the "Company") shall be to assist the Board in
fulfilling its responsibilities by overseeing and reporting to the Board with
respect to: (1) the quality and integrity of the Company's financial statements
and related reporting; (2) the Company's compliance with legal and regulatory
requirements; (3) the external auditor's qualifications, independence and
performance; (4) the performance of the Company's internal audit function,
including the adequacy of the Company's internal controls; and (5) such other
matters as may be assigned by the Board. The Audit Committee shall maintain free
and open communication with the Board, external auditors, internal auditors, and
management. In carrying out its mission, the Audit Committee shall have
discretion to initiate such investigations as it shall deem necessary and shall
have standing authority to employ special counsel or experts in circumstances
when it determines that necessary resources cannot be provided by regular
support staff. The Audit Committee shall coordinate and act as the audit
committee for all the Company's operations, including subsidiary companies.
Composition
The Audit Committee shall consist of three or more directors appointed by the
Board, each of whom shall be independent directors, and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the Committee.
"Independent director" shall have the same meaning as defined in National
Association of Securities Dealers, Inc., ("NASD") Rule 4200. All members of the
Audit Committee shall be able to read and understand fundamental financial
statements, including the Company's income statement, balance sheet and cash
flow statement. At least one member of the Audit Committee shall have accounting
or related financial management expertise as prescribed by NASD Rule 4350(d).
Meetings
Regular meetings of the Audit Committee shall be held no less frequently than
quarterly, on a schedule to be adopted by the Audit Committee. Special meetings
of the Audit Committee may be held for any purpose when called by the Chair or
any member. The Audit Committee may meet in separate executive sessions with
management, external auditors, and internal audit to discuss any matters that
the Audit Committee or any of these groups believe should be discussed
privately.
Duties
To fulfill its responsibilities and duties, the Audit Committee shall:
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
2. Maintain or enhance their familiarity with finance and accounting by
participating in appropriate educational programs as they deem
necessary.
3. Establish procedures for the receipt, retention and treatment of
complaints received regarding accounting, internal accounting
controls, or auditing matters, including the confidential, anonymous
submission by Company employees of concerns regarding questionable
accounting or auditing matters.
4. Engage and determine the funding for outside legal, accounting or
other advisors as it deems necessary to carry out its duties.
Financial Statements and External Auditor
1. Appoint, determine funding for and oversee the public accounting firm
to be used as the external auditor, including its independence and
effectiveness. The external auditor is ultimately accountable to the
Audit Committee, as representatives of shareholders. The Audit
Committee has the sole authority and responsibility to select,
evaluate, and where appropriate, replace the external auditor.
2. Receive and review a formal written statement from the external
auditor delineating all relationships between the auditor and the
Company, consistent with Independence Standards Board Statement 1. The
Audit Committee will actively discuss with the external auditor any
disclosed relationships or services that may impact the objectivity
and independence of the auditor, and will take any appropriate actions
to ensure the independence of the external auditor.
3. Review the plan, scope, and results of the external auditor's annual
audit of the Company's financial statements, including its report
thereon, conclusions regarding significant accounting estimates, and
recommendations with respect to accounting practices, policies or
procedures.
4. Review with management and the external auditor their assessments of
the adequacy of internal controls, and the resolution of identified
material weaknesses and reportable conditions in internal controls,
including the prevention or detection of management override or
compromise of the internal control structure.
5. Resolve any disagreements between the external auditor and management
regarding financial reporting. The Audit Committee may also discuss
with management any issues regarding the external auditor, such as
management's evaluation of factors relating to the external auditor's
independence.
6. Approve before use all external audit services and any non-audit
services of the external auditor as may be permitted by Section 10A of
the Security Exchange Act of 1934. Management shall not have authority
to engage the external auditor for any services without prior approval
of the Audit Committee.
7. Discuss (or appoint a Committee member to discuss) quarterly financial
statements and earnings press releases with management and the
external auditor
8. Review with management the Company's compliance with laws and
regulations designated by its regulators, including, but not limited
to those related to safety and soundness, loans to insiders, and
dividend restrictions.
9. Report promptly to the Board its deliberations and recommendations.
Internal Audit
1. Review and approve annually the internal audit plan and financial
budget, including the risk assessments of proposed activities of the
Internal Audit Department.
2. Receive reports, at least annually, from the Chief Auditor covering
organization and staffing of the Internal Audit department, scope of
activities, procedures for selection of audits and other relevant
information.
3. Review internal audit and credit examination reports and management
responses at least quarterly, including status reports of corrective
action on unresolved issues. Review variances from audit plans and
budgets.
4. Review the results of regulatory compliance self-assessments and any
corrective action.
5. Review and concur in the appointment, replacement, reassignment or
dismissal of the manager of the Internal Audit Department.