Trust me, I believe in audits!! I am an accountant, but an audit will not replace good internal controls. If you have cash fundraisers, and one person is in control of the cash, how can you verify that everything is depostited? An audit might not find those kind of missing funds. You must be sure that there is always 2 people counting cash.
GOOD!!! Now get it in writing and and a few witnesses. I think Iwould still call the DA's office just in case....just in case.
$500....I wonder if legally you can collect your bank fees from her too? Your right, $1000 at a time!
Still do the audit, then you know exact numbers and just how bad (or not) your group's cash flow is. It's not a bad habit to get the group into also. Our's are done by the school district also and it's nice.
Just an update. The mere mention of an audit is flipping this person out. She asked to meet with us last night. Apologized for what she has put us through. Although she did not admit to taking the money, she admitted that she LOST the money and signed a letter that she will pay it back in installments over the next three months. We did tell her that she cannot handle any monies in the future only for the fact that her god-given talents are not in bookkeeping. She has agreed to this. Thanks for all the support out there....
For our elementary PTO, the school district accountant audits the books each June (for free). We have to give up the check book and records for several weeks, maybe close to a month sometimes as he fits it in between other work. But it's no inconvenience since it's our down time.
Other groups often have an audit committee, a small team of parents/volunteers who normally have no role in the treasury. This works well.
Aside from uncovering any irregularities and assuring the books are in good shape, the annual audit also provides another service. Hopefully you have some good practices such as two signatures, requiring receipts, requiring expenditures to be voted, etc. But there always seems to be someone wanting an exception.
It's pure magic, to be able to say, "we need to follow these rules completely so our annual audit comes out okay" or "no, the auditor won't allow us to disburse funds without a receipt". Somehow the mere mention of an auditor or audit makes people more willing to comply!
For what it's worth, we are required to have an audit every year, and the audit is generally done by a volunteer that either has an accounting background or is a CPA. We're lucky that we have parents that are very generous with their time. The stipulation is that the person who handles the audit cannot have signatory authority on any of our accounts, so there is no conflct of interest. Generally, we try to find someone who is outside of the board to do the audit.
Thanks mum24kids. There are A LOT of great audit ideas there that I will look into. We'll try asking for the money (easiest) and if that doesn't work, have an audit done. We've done most of the groundwork that it will hopefully not cost that much. We've already appealed to the bank and explained our plight. They said they would try to give it to us half price or something. Then they presented us with a bill that the best they could do for us was $500!! Thanks again for the great ideas. I wonder if an accountant/parent would be a conflict of interest?
