In Search of the Bottom Line

How to select the Audit Committee

Governor shall appoint an Audit Committee of a minimum of three (3) members

DO NOT just ask your friends to serve

The Audit Committee should have a sufficient number of members to ensure needed skill sets and knowledge are represented on the committee

The Audit Committee needs to commit sufficient time to review, discuss, and consider the financial statements

Members of the Audit Committee need to have financial literacy/expertise (At a minimum, the ability to read and understand financial statements)

Willingness to do the right thing, not just do things right

Treasurer’s books should be delivered to the Audit Committee by July 31

Information the Treasurer needs to give to the Audit Committee

The Audit Committee needs these records for the year being audited: Checkbook register Bank statements Treasurer’s reports Cash receipts and disbursements Budget

Proving the Accuracy of the Books

Take the beginning balance established by the last audit, add the receipts for the year and subtract the disbursements to determine the BALANCE ON HAND AT THE END OF THE FISCAL PERIOD

This balance should agree with: (1) the balance on the treasurer’s financial report and; (2) the bank balance plus any cash on hand

If the Treasurer did not reconcile the bank statements, the Audit Committee should do so. The adjusted book balance and bank balance must agree with the BALANCE ON HAND AT THE END OF THE PERIOD

Ascertain that the correct amount of dues and initiation/reinstatement/ transfer fees have been collected from the membership

Verify the amount received for District dues

Check to see if the total amount of receipts agrees with the total deposits

Ascertain that the total amount of all checks written equals the total amount of disbursements recorded on the books

Verify proper Authorization

Verify that all checks were signed by the Treasurer and either the Governor or the Governor-Elect

Confirm that all checks written are supported by an expense voucher that has been approved by the Governor or the Governor-Elect

Audit Report

The report should be short and to the point. State what the review included, what was found, an opinion of the balances and any recommendations which may be helpful

It is the duty of the Chair of the Audit Committee to prepare the report. The Committee should make an effort to correct any inaccuracies

Sample Report by the Audit Committee

“The Audit Committee of the Pilot International District of _____, certifies that it has examined the books of the treasurer from the period of (date, first day of fiscal year) through (date, last day of fiscal year), and has found them to be correct.”

Each member of the Audit Committee should sign and date the audit report

Questions