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Time to Conduct Your Branch Audit
By Jimmy Warden
In April, I promised future columns would address training for secretary/treasurers. In this column, I would like to share guidelines for conducting a branch financial audit.
Every branch must conduct an audit of all financial records at least once a year or whenever there is a change in the treasurer position. No one should assume the treasurer duties and accept financial records and accounts without an audit being conducted to transfer the responsibility. Once you accept the position, you are responsible!
An Audit Committee should be established and review (audit) the branch’s financial books. Members of the Audit Committee should have some knowledge in finance, if at all possible, as to minimize training. The person most familiar with audit procedures should be selected chair.
The Audit Committee will consist of at least three members who are appointed by the branch president. Please verify your respective Constitution & Bylaws as some branches stipulate that elected trustees will perform the audit.
If your branch conducts the audit once a year, now is a good time to perform the audit. The treasurer will need to have all records available as your branch should be filing its tax return. Just before the audit, the treasurer must have all items posted and all receipts cross-referenced before giving the books to the audit committee. All receipts should be in chronological sequence.
Documentation should include, but not be limited to, all bank statements, DCO dues-withholding statements, bank registers, vouchers and canceled checks. Every check drawn or credit card charge (disbursements) should have a signed voucher authorizing payment. The voucher must have two signatures authorizing the disbursement—the president and treasurer.
Also, before the audit, the treasurer should prepare a financial statement. The Audit Committee can amend the financial statement based on its findings. After completing the audit, at the next membership meeting, the chair of the Audit Committee should share the findings with members.
At each branch meeting, the treasurer should provide members a financial report as part of the regular order of business. Some branches prefer a full financial accounting showing all income and checks drawn since the previous meeting (financial report). Other branches prefer just to give a general financial statement since the previous meeting. Both scenarios are acceptable.
At the end of the branch’s fiscal year, the treasurer is required to develop a full financial report. This report should be shared with members. Retaining records is important and an IRS regulation. You can refer to the NAPS Officer Training Manual on the NAPS website for the list of records required to be retained. The manual also lists the duties and responsibilities associated with each branch officer.
I would like to thank those members who are bringing in new members. We have been receiving an increased number of 1187s. Thank you to our membership champions and members of the “High-Five Club!” Increasing membership demonstrates leadership.