Auditing

Welcome to the RMC Auditing page. My hope is to share informative information about the importance of auditing, the benefits of auditing, how to read financial statements and other informative information.

Why Audit?

Fraud Prevention

The importance of auditing starts with fraud prevention. Audits ensure state and federal guidelines are being followed and checks that proper internal controls are in place.

Compliance

Audits happen to stay in compliance with auditing policies set forth by the organization.

Accuracy & Accountability

Audits check for accuracy within the financial records and by holding treasurers accountable by ensuring donations are received to the correct account that they are designated for. This ensures donors that their donation will be handle properly and not misused.

Peace of Mind

Audits give peace of mind to the treasurer knowing they are correctly handling God’s funds to further spread the goods news of Jesus Christ’s loving mercy.

The significance of Timely Submission: Ensuring Efficiency in Church Audits

Recognizing that many of you are volunteers balancing full-time responsibilities, I understanding that delays in submitting audit materials can occur. However, effective communication is key to ensuring transparency and efficiency in the auditing process. Please keep me informed of any challenges or delays you may encounter, so we can work together to address them promptly and ensure the smooth progress of the audit. Below are key points outlining why effective communication is vital and the effects that delays can have on the auditing process.

Time Wastage

Time Wastage: Months-long delays in sending audit materials result in significant time waste for both the auditor and the church.

Opportunity Cost

Opportunity Cost: The time spent waiting for audit materials can leave me in a state of limbo where I cannot complete my job duties, resulting in wasted time and money.

Deadlines

Deadlines: Delays in receiving audit materials may result in missed deadlines that RMC has to meet in order to be in compliance with local and federal laws. This may also lead to other regulatory compliance which expose the church to penalties and fines.

Overall Inefficiency

Overall Inefficiency: Prolonged delays in sending audit materials hinders the objectives and can lead to loss of trust in the churches ability in their financial management capabilities both internally and externally.

Bank Reconciliation Report

Monthly bank reconciliation reports are essential for treasurers as they ensure the accuracy of financial records, detect errors and discrepancies, uphold transparency, and accountability in financial management. Monthly bank reconciliation reports need to be done monthly and signed by the pastor.

Bank reconciliation reports compare the bank statement ending balance to the accounting software balance and by comparing these two reports it ensures all financial transactions are properly recorded and accounted for.

Starting with the dates on your bank reconciliation report from left to right: date, check number, description of payment or deposit, amount. Please see the bank reconciliation report examples.

Correct Example #1

Negative Example #2

Positive Example #3

Church Financial Statements

Now with financial statements think of them as a health check up or a report card. Health check ups and report cards are an overall report of your health and grades. Financial statements are similar in that they show the overall financial health of the church or how well the church is performing (report card). Financial statements show the overall view of how the churches money have been handled.

Starting with titles on your financial statement you will see from left to right: code, description, last month balance, direct, allocations, transfers, paid out, current balance. Please see the financial statement example for an explanation of each of those titles.

Example Statement #1

Example Statement #2