Download complete “Parish Financial Audit Guidelines” document.
Auditing the Church’s books is a mark of great responsibility, one that should be taken with the greatest seriousness and the highest level of confidentiality. Auditing demonstrates good stewardship for all to see. It is a message to local church donors that you care about their gifts.
At no time should conducting an audit be the symbol of distrust. The Parish Treasurer should be grateful for the opportunity to have their work and procedures validated.
Reasons for auditing are:
-to protect the persons in the church responsible for handling funds
-to build the trust and confidence of the financial supporters of the church in the method of accounting for their gifts
-to set habits of fiscal responsibility to assure that there will be continuity in accountability when the terms of those who handle funds expire
-to assure that gifts made to the church with special conditions attached (restricted donations) are consistently administered in accordance with the donors’ instructions
-to provide checks and balances for sums received and expended.
In addition to tracking the cash through the system, auditors typically 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
Systems for retaining and accessing meeting minutes that have financial implications
This handbook has been put together to make your task easier. It is based on the document, Parish Financial Audit Guidelines, 27 September 2007, published for the Diocese of the Midwest. Please read it carefully and feel free to add whatever you may find helpful for future auditors. You should also consult the IRS publication:
Download the Tax Guide for Churches and Religious Organizations.