**Exhibit 10.37****RED TRAIL ENERGY, LLC****AUDIT COMMITTEE CHARTER****ADOPTED ON April 9, 2007****I. PURPOSE**     The primary functions of the Audit Committee (the “Committee”) are to assist the Board ofGovernors of Red Trail Energy, LLC (the “Company”) with the oversight of (i) the Company’saccounting and financial reporting processes and audits of the Company’s financial statements and(ii) the qualifications, independence, appointment, retention, compensation and performance of theCompany’s registered public accounting firm. The term “registered public accounting firm” as usedherein shall mean any public accounting firm registered with the Public Company AccountingOversight Board (the “Accounting Board”) under Section 102 of the Sarbanes-Oxley Act of 2002 thatperforms the auditing function for the Company. Although the Committee has the powers andresponsibilities set forth in this Charter, the role of the Committee is oversight. It is not theduty of the Committee to conduct audits, to establish and maintain disclosure controls andprocedures and internal controls over financial reporting, or to determine that the Company’sfinancial statements and disclosures are complete and accurate and are in accordance with generallyaccepted accounting principles and applicable rules and regulations. These are the responsibilitiesof Company management, and subject to audit by the Company’s registered public accounting firm.**II. EFFECTIVE DATE, COMPOSITION AND INDEPENDENCE**     This Charter shall become effective upon the effective date (the “Effective Date”) of theCompany’s filing with the Securities and Exchange Commission (the “SEC”) pursuant to the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”). Subject to any permitted exceptions,exemptions and phase-in compliance periods of the Nasdaq Stock Market Listing Standards, theCommittee shall consist of three or more governors of the Company, as the Board of Governors maydetermine, each of whom shall meet the independence and other qualification requirements of theExchange Act, the rules and regulations thereunder and the applicable rules of the Nasdaq StockMarket Listing Standards. Consistent with the applicable exceptions, exemptions and phase-inperiods, the Committee only shall be required to include: (i) one independent director during the90 day period following the Effective Date; and (ii) a majority of independent directors thereafteruntil the first anniversary of the Effective Date. At least one of the Committee members mustsatisfy the financial sophistication requirements of the listing standards of the Nasdaq StockMarket, and the Committee shall use diligent efforts to assure that at least one member qualifiesas an “audit committee financial expert,” as defined by rules of the SEC.
 

 
**III. MEETINGS AND PROCEDURES**     The Committee shall meet at least once every fiscal quarter. The Committee may request thatmembers of management, representatives of the registered public accounting firm and others attendmeetings and provide pertinent information, as necessary. In order to foster open communications,the Committee shall meet at such times as it deems appropriate or as otherwise required byapplicable law, rules or regulations in separate executive sessions to discuss any matters that theCommittee believes should be discussed privately. Committee meetings will be governed by thequorum and other procedures generally applicable to meetings of the Board of Governors under theCompany’s Operating Agreement, unless otherwise stated by resolution of the Board of Governors.**IV. RESPONSIBILITIES AND DUTIES**     **A. General Matters** 1. The Committee, in its capacity as a committee of the Board ofGovernors, shall be directly responsible for the appointment, compensation,retention (including termination) and oversight of the work of the registeredpublic accounting firm (including resolution of disagreements betweenmanagement and the registered public accounting firm regarding financialreporting) engaged for the purpose of preparing or issuing an audit report orperforming other audit, review or attest services for the Company. Theregistered public accounting firm shall report directly to and be accountableto the Committee.  2. To the extent required by applicable law, rules andregulations, the Committee shall pre-approve all auditing services andnon-audit services (including the fees and terms thereof) permitted to beprovided by the Company’s registered public accounting firm contemporaneouslywith the audit, subject to certain de minimus exceptions for permittednon-audit services described in Section 10A(i)(1)(B) of the Exchange Act, whichshall be approved by the Committee prior to the completion of the audit.  3. The Committee shall have the authority to engage independentcounsel and other advisers, as it determines necessary to carry out its duties.The Committee shall determine the extent of funding to be provided by theCompany for payment of (i) compensation to any registered public accountingfirm engaged for the purpose of preparing or issuing an audit report orperforming other audit, review or attest services for the Company, (ii)compensation to any independent counsel and other advisers retained to advisethe Committee, and (iii) ordinary administrative expenses of the Committee thatare necessary or appropriate in carrying out its duties.  4. The Committee may form subcommittees consisting of one or moremembers and delegate to such subcommittees authority to perform specificfunctions, including without limitation pre-approval of audit and
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   non-audit services, to the extent permitted by applicable law, rules andregulations.     **B. Oversight of the Company’s Relationship with the Auditors**     With respect to any registered public accounting firm that proposes to perform audit servicesfor the Company, the Committee shall: 1. On an annual basis, review and discuss all relationships theregistered public accounting firm has with the Company in order to consider andevaluate the registered public accounting firm’s continued independence. Inconnection with its review and discussions, the Committee shall: (i) ensurethat the registered public accounting firm submits to the Committee a formalwritten statement (consistent with the Accounting Board independence standardsas then in effect) delineating all relationships and services that may impactthe objectivity and independence of the registered public accounting firm; (ii)discuss with the registered public accounting firm any disclosed relationship,services or fees (audit and non-audit related) that may impact the objectivityand independence of the registered public accounting firm; (iii) review theregistered public accounting firm’s statement of the fees billed for audit andnon-audit related services, which statement shall specifically identify thosefees required to be disclosed in the Company’s annual proxy statement; (iv)satisfy itself as to the registered public accounting firm’s independence; and(v) obtain and review a report by the registered public accountants describingtheir internal quality control procedures and any material issues raised by themost recent internal quality review, or peer review, of the firm, or by anyinquiry or investigation by governmental or professional authorities, withinthe preceding five years and any steps taken to deal with such issues.  2. Ensure the rotation of the lead (or coordinating) audit partnerand other significant audit partners as required by applicable law, rules andregulations.  3. Establish clear hiring policies for employees or formeremployees of the registered public accounting firm proposed to be hired by theCompany that meet applicable SEC regulations and Nasdaq Stock Market ListingStandards. In addition, on an annual basis, confirm that the registered publicaccounting firm is not disqualified from performing any audit service for theCompany due to the fact that any of the Company’s chief executive officer,chief financial officer, controller, chief accounting officer (or a personserving in an equivalent position) was employed by that registered publicaccounting firm and participated in any capacity in the audit of the Companyduring the one-year period preceding the date of the initiation of the audit ofthe current year’s financial statements.
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 4. Establish with the registered public accounting firm the scopeand plan of the work to be performed by the registered public accounting firmas part of the audit for the fiscal year.     **C. Financial Statements and Disclosure Matters**     With respect to the Company’s financial statements and other disclosure matters, the Committeeshall: 1. Review and discuss with management and the registered publicaccounting firm the Company’s quarterly financial statements.  2. Review and discuss with management and the registered publicaccounting firm the Company’s annual audited financial statements and thereport of the registered public accounting firm thereon.  3. Review and discuss all material correcting adjustmentsidentified by the registered public accounting firm in accordance withgenerally accepted accounting principles and SEC rules and regulations that arereflected in each annual and quarterly report that contains financialstatements, and that are required to be prepared in accordance with (orreconciled to) generally accepted accounting principles under Section 13(a) ofthe Exchange Act and filed with the SEC.  4. Review and discuss all material off-balance sheet transactions,arrangements, obligations (including contingent obligations) and otherrelationships of the Company with unconsolidated entities or other persons,that have or are reasonably likely to have a current or future effect onfinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures, or capital resources, which are required to be disclosedin response to Item 303, Management’s Discussion and Analysis of FinancialCondition and Results of Operation, of Regulation S-K.  5. Discuss with management and the registered public accountingfirm significant financial reporting issues and judgments made in connectionwith the preparation of the Company’s financial statements, including anyjudgments about the quality, appropriateness and acceptability of the Company’saccounting principles, significant changes in the Company’s selection orapplication of accounting principles and any other significant changes to theCompany’s accounting principles and financial disclosure practices that aresuggested by the registered public accounting firm or management.  6. Review with management, the registered public accounting firmand the Company’s counsel, as appropriate, any legal, regulatory or compliancematters that could have a significant impact on the Company’s financialstatements, including significant changes in accounting standards or rules
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   as promulgated by the Financial Accounting Standards Board, the SEC or otherregulatory authorities with relevant jurisdiction.  7. The review and discussions hereunder with respect to auditsperformed by the registered public accounting firm shall include the mattersrequired to be discussed by the Accounting Board auditing standards then ineffect. These matters would include the auditor’s responsibility undergenerally accepted auditing standards, the Company’s significant accountingpolicies, management’s judgments and accounting estimates, significant auditadjustments, the auditor’s responsibility for information in documentscontaining audited financial statements (e.g., MD&A), disagreements withmanagement, consultation by management with other accountants, major issuesdiscussed with management prior to retention of the auditor and anydifficulties encountered in the course of the audit work.  8. Receive and review all other reports required under theExchange Act to be provided to the Committee by the registered publicaccounting firm including, without limitation, reports on (i) all criticalaccounting policies and practices used by the Company, (ii) all alternativetreatments of financial information within generally accepted accountingprinciples that have been discussed with management, ramifications of the useof such alternative disclosures and treatments, and the treatment preferred bythe registered public accounting firm, and (iii) all other material writtencommunications between the registered public accounting firm and management,such as any management letter or schedule of unadjusted differences.  9. Following completion of its review of the annual auditedfinancial statements, recommend to the Board of Governors, if appropriate, thatthe Company’s annual audited financial statements and the report of theregistered public accounting firm thereon be included in the Company’s annualreport on Form 10-K filed with the SEC.  10. Prepare the Audit Committee report required by the SEC to beincluded in the Company’s annual proxy statement and any other Committeereports required by applicable laws, rules and regulations.     **D. Internal Controls and Compliance Matters**     With respect to the Company’s internal controls over financial reporting and compliancematters: 1. When applicable, review and assess any disclosures made to theCommittee by the Company’s Chief Executive Officer and Chief Financial Officerduring their certification process for the Company’s Forms 10-K and Forms 10-Qabout any significant deficiencies in the
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   design or operation of internal controls over financial reporting ormaterial weaknesses therein and any fraud involving management or otheremployees who have a significant role in the Company’s internal controlsover financial reporting.  2. When applicable, review and discuss with management and theregistered public accounting firm any major issues as to the adequacy of thedesign or operation of the Company’s internal controls over financialreporting, any special steps adopted in light of significant deficiencies ormaterial weaknesses therein and the adequacy of disclosures about changes ininternal controls over financial reporting.  3. When applicable, review and discuss with management and theregistered public accounting firm management’s annual assessment of theCompany’s internal controls over financial reporting and the registered publicaccounting firm’s attestation report thereon.  4. Establish and review procedures within the time period requiredby applicable law, rules and regulations for (i) the receipt, retention andtreatment of complaints received by the Company regarding accounting, internalaccounting controls or auditing matters, and (ii) the confidential, anonymoussubmission by employees of the Company of concerns regarding questionableaccounting or auditing matters.**E. Other Miscellaneous Matters**The Committee shall also have the responsibility to: 1. Review and discuss the Company’s practices regarding earningspress releases, as well as financial information.  2. Review and discuss all corporate attorneys’ reports of evidenceof a material violation of securities laws or breaches of fiduciary duty.  3. Review and approve all related-party transactions (i.e., thosetransactions required to be disclosed in response to Item 404, CertainRelationships and Related Transactions, of Regulation S-K) for potentialconflict of interest situations on an ongoing basis, unless otherwise delegatedto another committee of the Board of Governors consisting solely of independentgovernors.  4. If required by applicable law, rules or regulations, review andapprove (i) the adoption of, and any change to or waiver of, the Company’scode(s) of business conduct and ethics applicable to governors, seniorfinancial officers (including the chief executive officer, chief financialofficer, controller, or persons performing similar functions) or employees, and(ii) any disclosure made in the manner permitted by SEC rules that is requiredto be made regarding such change or waiver, unless these duties are
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 ** ** otherwise delegated to another committee of the Board of Governorsconsisting solely of independent governors.  5. Review and discuss with management and the registered publicaccounting firm the Company’s major financial risk exposures and the stepsmanagement has taken to monitor and control such exposures (includingmanagement’s risk assessment and risk management policies).  6. Review with management and the registered public accountingfirm the sufficiency in number and the quality of financial and accountingpersonnel of the Company.  7. Review and reassess the adequacy of this Charter annually andrecommend to the Board of Governors any changes or amendments the Committeedeems appropriate.  8. Perform any other activities consistent with this Charter, theCompany’s Operating Agreement and governing law as the Committee or the Boardof Governors deems necessary or appropriate.
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