Mission Center Audit Form

Procedure discussed in PB110 training

In order to perform the audit, the auditor should have access to:

All accounting records including receipts, deposit slips, bank statements and canceled checks, invoices, bills and other documentation and correspondence that is relevant to the finances of the congregation.

• Copy of financial statements to be audited
• Minutes of business meetings
• List of officers
• Copies of newsletters
• Chart of accounts (line items of the budget)
• Financial officers records, access to accounting software
• Invoices, vouchers, canceled checks, deposit slips, receipts, bills, and other documentation/correspondence relevant to finances
• Copy of December bank reconciliation of the previous year
• Receipts for income
• Monthly reports
• Access to bank account information and statements
• Access to other investment information and statements
• Copies of contracts
• Copies of 1099's
• Obtain the last bank statement (unopened) and perform the reconciliation

Steps to follow:

Cash Procedures

1. Obtain bank reconciliation for each account and:
1. Trace final balances to financial statement
2. Verify that checks listed as outstanding actually cleared the bank after the statement date
3. Verify that any deposits in transit are credited to the account on subsequent statememts
4. Compare bank balance per the bank reconciliation with the bank account statement
5. Verify that a bank reconciliation is performed on a monthly basis
6. Verify the check book balance
7. Any checks outstanding over three months, if so they need to be written off
8. Obtain the last bank statement (unopened) and perform the reconciliation.
2. Trace checks from bank statement to the Financial Officers books.
   1. Endorsement agrees with payee
   2. Compare check with entry in GL
3. Trace deposits from bank statement to the Financial Officers books.
1. Trace cash reciepts to GL
2. Verify bank deposit reciept
3. Verify other reciepts are complete and attached
4. Examine vendor's invoices or signed receipts payments
1. Trace to GL
2. Verify only authorized expenditures were made
3. Verify need for 1099

Income Testing

5. Trace income totals from the year-end financial statement to GL account
6. Select two (2) month's receipts at random:
1. The total of all receipts in a month should equal the total of all total of all deposits for that month
2. Trace each deposit to the corresponding bank statement
3. Verify interest income allocations

Expense Testing

7. Trace expense totals from the year-end financial statements to their GL account
8. Compare amounts on the financial statement for the year with the budget and prior year expenditures
9. Select one (1) month disbursements at random:
1. a. Trace each expenditure, journal entry, to its corresonding invoice or expense voucher
2. b. Trace each expenditure, journal entry, to its corresponding bank statement

Miscellaneous Testing

10. Make sure all checking, savings, and other investment accounts are made in the name of the church
11. Other assests such as investments in certificates of deposit should be verified by examination of the assest or by direct communication with the depository
12. Examine the minutes of he conferences to see that all expenditures were made in accordance with an approved budget
13. Make sure no balance is kept in regard to World Church funds
14. 14. Verify if building is rented by other groups, if so then:
1. Verify contracts approved by Legal Services
2. Verify proof of insurance
15. Make sure no cash receipts were issued for voluntary service or non-cash donations
16. Are there any loans, if so then their status needs to be reflected on financial report
17. If total of invested funds in greater than $100,000 then verify that they are invested with AIP and reflected on financial reports
18. Verify investment balances and make sure earnings are posted in books
19. Verify if anyone is used as custodian, snow plower, etc. and paid, if so then:
1. Verify taxes and FICA are withheld
2. Contract is in place
1. Review journal entries for appropriate documentation.
2. Review business meeting minutes for the period since the last audit noting items related to finances.

It is not necessary to check every single entry in the books, but the auditor should test enough of the transactions to be satisfied as to the reasonable correctness of the accounts.

A sampling of the transactions would include:

1. Trace every disbursement over $250.00.
2. Select two months and trace every receipt and disbursement.
3. For the other ten months select random receipts and disbursements to verify.