CHURCH AUDITS

 

            The Upper New York Annual Conference (and I assume, most Conferences in the United Methodist Church, as well as the Book of Discipline requires an annual audit of the financial records of the local church.

            Many of us hear the word “audit” and think a tax audit by the Internal Revenue Service or companies finding embezzlement because of an audit. Of course, both of those are true, but we need to consider a different question:

WHAT IS A LOCAL CHURCH AUDIT?

 

                A local church audit is an independent evaluation of the financial reports and records      and the internal controls of the local church by a qualified person or persons for the purpose of reasonably verifying the reliability of financial    reporting, determining whether     assets are being safeguarded, and whether the law, the Discipline, and policies and procedures are being complied with.

 

            The Discipline mandates that every local church finance committee shall make provision for an annual audit of the records of the financial officers of the local church and all its organizations and shall report to the charge conference in order to

 

            (1) to protect persons the local church elects to offices of financial responsibility from unwarranted charges of careless or improper handling of funds;

 

            (2) to build the trust and confidence of financial supporters of the church in the way their money is being accounted for (trust and confidence lead to improved patterns of financial support);

 

            (3) to set habits of fiscal responsibility to assure that when there is turnover in       personnel there will be continuity in accountability and nothing will fall through the cracks;

            (4) to assure that gifts made to the church with special conditions attached are     consistently administered in accordance with the donors’ instructions and thus let           donors know their gifts are used as intended; and

 

            (5) to provide checks and balances for sums received and expended.

 

           

            I know all of that may sound horrible, but:

 

Conducting an audit is not a symbol of distrust!

 

It is a mark of responsibility!

 

It is good stewardship demonstrated for all to see!

 

It is a message to local church donors that you care about their gifts!

 

            A church audit is important. I do many internal church audits every year, and while that work includes preparing the “fund balance report” and looking at bank statements, paid bills, payroll records, deposit tickets and counting sheets, I think the most important reason and outcome of a local church audit is to assist the local church is having good policies and procedures in place that will assure, as much as possible, that assets are protected, that donors’ gifts are used properly, that the best possible people are in place to do the work; and that the financial aspects of the church are used in the best way to enable the work of the church, what the church has been called by God to do gets accomplished.

 

 

Please feel free to contact me at (315) 427-3668 or susanranous@unyumc.org if you have any questions about an internal church audit.