Diocesan Seal The Episcopal Diocese 
of Eastern Michigan

WHY DO AN AUDIT?

SOME BASICS EVERY CHURCH SHOULD KNOW


·        Annual audits are equivalent to annual “check-ups” with your medical doctor.  Audits should be part of a preventative “financial” health plan for every church, regardless of how big or small the church’s budget is.

·        Just as a physician would not be apt to give him or her self a thorough, objective physical examination, individuals responsible for receiving or disbursing funds (and their relatives) should not be the persons who conduct the annual audits.  It is appropriate to include a financially knowledgeable Episcopalian from another church on the Audit Committee.  If you like, the diocesan office can help you find someone from another church to help conduct the audit.  An outside viewpoint can be enlightening and refreshing.

·        Audits cannot prevent a financial scandal, but they can help assure that financial common sense has prevailed.  Minor problems can be identified and corrected before they become major.

·        The annual financial audit and financial statements, together with monthly financial reports covering all the congregation’s funds, should be readily accessible to the members of the congregation.  There is no room for secrets in a healthy financial system.

·        Healthy financial systems and reporting support good decision making when difficult choices must be made, because those responsible for making the decisions are freed up to focus on the choices.

·        Separation of duties, rotation of duties, and adequate checks and balances are your friends in preventing and discouraging mishandling of funds.  An annual audit can assure your church that these and other important safeguards are all in place.

·        Thorough audits protect the Treasurer and give peace of mind to the wardens, vestry or bishop’s committee, and church members.

·        Annual audits are required by national canons and as part of the “Basic Standards of Congregations” adopted by the 1997 annual convention of the diocese.

 

Please put the annual audit on the top of your list of things to do!

                                               Adapted from Checkpoint, Nov. 1992