Why Should A Church Be Audited?

  • Protects the persons your organization elects to offices of financial responsibility from unwarranted charges of careless or improper handling of funds.

  • Builds the trust and confidence of the financial supporters of the organization in the way their money is being accounted for.

  • Sets habits of fiscal responsibility to assure that when there is turnover in personnel there will be continuity in accountability.

  • Assures that contributions made to the organization with special conditions attached are consistently administered in accordance with the donors' instructions, and thereby letting donors know their contributions are being used as intended.

  • Provides checks and balances for sums received and expended.

What Does An Audit Accomplish?

An audit should:

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  • Independently verify the reports of the treasurer(s).

  • Follow the funds and see if proper steps are being taken in handling them.

  • Document that donated funds have been used as stipulated by the donors.

In addition to tracking the cash through the system, an auditor typically will evaluate:

  • Accounting controls (systems that reduce the possibility of loss or errors).

  • Segregation of duties (assurances that more than one person is involved in critical steps in handling money so that there can be checks and balances).

  • Reasonableness of systems and procedures in the light of all factors, including the size of the organization and its budget.

  • Adequacy of insurance coverage.

  • Records that show donors' stipulations for the use of contributions made to your organization.

What Information Is Looked At?

  • Copies of all your organizations policies and procedures related to finance and treasury functions and copies of minute approving those policies.

  • Listing of all bank and investment accounts, including the person authorized to sign on each, and including any special use accounts under the control of the pastor(s) or administrator and in the name of the church.

  • All financial statements for each month of the year, plus December of the prior year and January of the subsequent year (a fourteen month period).

  • Bank and investment account statements for the same period.

  • Bank reconciliations for that same period.

  • Original books of entry, which will be the general and subsidiary journals; for those books that are computerized, a print-out of all transactions by account for the entire year.

  • All paid invoices, payroll data and files (including 941's, year-end W-2's, 1099's and transmittal forms), income transmittal's and deposit records for the fourteen month period.

  • The Financial Secretary's records and other income records for the same period.

Items Needed For Bi-Annual Audit

  1. Bank Statements (Include Savings accounts, Revolving Fund and C.O.D.'s)

  2. Canceled Checks

  3. Check Stubs

  4. Paid Invoices and receipts

  5. General Ledger (if manual accounting)

  6. Tithe envelopes

  7. Tithe & Offering receipts (if manual accounting)

  8. Weekly contribution reports

  9. Financial Statements

  10. Monthly remittance reports

  11. Board Minutes

  12. Backup disc(s) including password.

“There is no position of trust within the gift of this denomination that is of more importance, or should be more carefully administered than that of the auditor. The constant operation of the institutions must be carefully observed in order to see that no confidence has been misplaced.” 
—JJ Ireland, Address to Auditors Convention October 21, 1914

CONTACT

auditor

In compliance with organizational policy each church is to be audited bi-annually.  You will receive a letter/e-mail requesting your books at any given date during the year. 

We recommend that records be sent by a carrier that can provide a tracking number such as UPS or FedEx.  Please ship your books to: 3301 Parallel Parkway, Kansas City, KS 66104

 

© Copyright Central States Conference 2019

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