Although the chances of your church being audited by the IRS are slim, they do happen. One way to help squelch the odds of that happening is to have your church perform an ANNUAL Internal church audit. Most churches are not large enough to warrant the cost of a full-blown external CPA audit, so an internal audit is just the ticket to help ensure ongoing accountability, transparency and compliance.
In today’s episode we are going to cover 4 reasons to perform an internal audit AND some areas that I highly recommend that you include in such an audit.
Reasons to perform an internal audit:
1. Ensuring Financial Accountability
2. Strengthening Internal Controls
3. Demonstrating Transparency
4. Compliance with Legal and Regulatory Requirements
Areas to include in your audit:
Financial statement reporting (monthly reports)
Cash receipts (including counting offerings)
Donation recording
Cash disbursements (petty cash fund?)
Bank statement reconciliation
Assets (bldg./land/equipment) & Insurance policies
Accounts Payable (incl. any outstanding mortgages/notes payable)
Personnel (EE records/files/proper classification) & Payroll filing requirements
And then end the audit with goals you have for the upcoming year.
xo,
Michelle
Next Steps:
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