Once your organization has selected an auditor and scheduled the dates, you’ve got to be ready. This means the books of account for the audit year must be closed, and key financial, organizational, and other business records must be available for review.
“To be ready for an audit, you’ll need to have around 40 items available for the auditor,” said Henry Flood, senior advisor for grant administration for The Grantsmanship Center in Los Angeles, Calif. “But unfortunately, it’s not uncommon for organizations to encounter difficulty closing the books and getting other critical records in order.”
A sampling of items you’ll need on hand include:
* Governing documents;
* An up-to-date list of organizational officials;
* Minutes of board meetings;
* Policies and procedures;
* Lease and loan agreements;
* The annual budget;
* A list of grants along with award documents; reconciliations for each bank account;
* Year-end trial balance and financial statements; and,
* A list of accountable assets.
To save time, money, and headache associated with audits, Flood urges managers to be consistent in maintaining essential management files, and in completing financial and reporting tasks on time. When an organization falls behind in this work, it’s much more difficult to prepare for the audit.
Keeping financial and management records current and well organized throughout the year is the best way to ensure you’ll be ready when the auditor shows up. ©Copyright 2016 The Grantsmanship Center.