Hey Nonprofits, Make Your Next Audit a Piece of Cake
Whether it’s coming up on the calendar, or perhaps you've experienced one that wasn’t pleasant, here are a few tips to make the Nonprofit audit process a seamless and valuable one.
First, get your organization into the proper mindset: the value of an audit should be recognized.
The outcomes of an audit can have positive results, such as:
- Developing better internal controls
- Obtaining knowledge of current nonprofit best practices
- Confirmation from an independent expert of your organization's performance
- The audited financial statements will help access precious funding for your mission.
With these beneficial results in mind, you and your team should feel energized to make the process work.
Second, communicate with your auditor at the outset.
- Who will be the primary contact?
- What is the best way to communicate – by email? Phone?
- 24-hour response guarantee?
- What information and resources should you have available upon the first visit?
- Did your CPA provide you with a punchlist of documents to have ready?
Setting these expectations early will go far in having that “Draft” ready for approval at your next Board or Finance Committee meeting.
Third, who will be your staff or volunteer that has the expertise to oversee the auditor’s final product?
If you rely entirely on your CPA for the skills needed to draft a full set of financial statements, then your organization has an internal control deficiency. The auditor must report that deficiency in a separate letter to your Board.
So, do your best to seek CPA’s for your internal or outsourced bookkeeping. If that is not feasible, work very hard to entice a CPA to your Board or Finance Committee. There are hundreds of CPA firms with skillsets that are important to your organization. You don’t need a wizened veteran – a five-year staffer can provide a lot of value to you and your relationship with your hired CPA.
Last, expect something more than just the financial statements from your auditor.
What have they seen at their other clients, or through their years of experience, that can be beneficial to your organization? Great policies? The best strategic plan facilitator in town? A simple expense reimbursement form? Contemporary Board position descriptions? Ask and expect this kind of advice or find another firm that will provide you with this important added-value service.
Be prepared and you can look forward to your next audit with confident enthusiasm.
Rolland Standish has over 25 years in public accounting and is the partner-in-charge of H&J's broad non-profit client base - cultural, social, churches, trade associations, unions and many more - located in Northern Ohio, New York, and New Jersey. An active volunteer, Rolly has held leadership positions in area non-profits, including the Arthritis Foundation, LakewoodAlive, and WIRE-net.