Why an Audit Committee is required
The audit helps verify the accuracy of the chapter’s financial and performance
reporting, and it supports the integrity of the processes in place to ensure
that funds are being distributed in the manner intended. This helps assure
members that Thrivent Financial and its chapters are being good stewards of
the resources available to help meet our vision of demonstrating care and
concern for others.
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Chapter leader responsibilities in relation to the audit
The chapter president is responsible for assuring that the Audit Committee is in place and that the audit occurs. It is recommended that a chapter leader, other than the financial or assistant financial director, oversee the auditing process.
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Membership of committee
The Audit Committee must consist of at least three chapter members, but additional
nonmembers may serve. To ensure independence, Thrivent Financial associates,
field managers, chapter leadership board members and close relatives of leadership
board members should not be committee members. Because the chapter
system is new and all reporting is done online, it would be good to have a
couple chapter leadership board members available during the audit to answer
questions and provide access to online records, if needed.
Note: There may be situations when a chapter leadership board has difficulty finding a group of volunteers willing to serve on the Audit Committee or feels more comfortable having its books looked at by a professional. In these cases, the leadership board can vote to use operating funds to pay an independent, professional auditor to perform an audit of the chapters finances and performance. The same guidelines as outlined above should be used to select an auditor to ensure independence.
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Items that Audit Committee needs
Chapter leaders should provide the Audit Committee or independent auditor with the guidelines documented under Financial
Audit and Performance
Audit below. These guidelines also are documented in the Conducting
Year-End Audit of Finances and Activities step-by-step resource guide
(PDF, 95K), which can be printed from the Tutorials/Quick
References page on the Volunteer Resources and For Chapter Leaders sections
of Members/Chapters.
Chapter leaders also need to gather the following records for the committee or independent auditor:
- Chapter meeting notes.
- Monthly bank statements.
- Checkbook ledger and duplicate check register.
- Copies of, or access to, the list of activities reported online.
- Receipts for general expenses.
- Year-end Chapter Summary Report.
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Financial Audit
Provide these guidelines to your Audit Committee or independent auditor:
Income
- Obtain copies of all checking account statements to verify the amount
of money the chapter received from Thrivent Financial for Lutherans.
- Do a spot check of some of the deposits made by the chapter into the checking
account for fund-raisers. (Note: Time may not permit this for every
chapter activity. Review enough deposits until you feel comfortable with
the chapter's reporting.)
- Verify that the deposit made into the checking account for a given
activity matches the amount of funds reported online as being raised
(e.g, if the chapter reported that $500 was raised for an activity,
there should be a $500 deposit into the chapter checking account for
that activity.).
- If the amount reported doesn’t match the deposit amount, verify that
there is a letter
of acknowledgement from the cohosting organization that verifies
the amount reported online was raised and explains where the remainder
was deposited. This letter should be included with the Receipts, Funds
Raised and Expenses Report for that activity.
Disbursements
- Review the duplicate checks in the checkbook and verify that all are intact
and legible, with no duplicates missing.
- Trace each disbursement or withdrawal to a bill, receipt or reference
in the chapter meeting minutes of the chapter leadership board that authorizes
the disbursement.
- All checks written to reimburse expenses should have an accompanying receipt.
- Reimbursements for mileage should include dates of travel, purpose of travel (including beginning and ending destinations), and beginning and ending mileage.
- Verify that a check has been written for each activity.
- Verify that a logical relationship exists between the payee and the service
used or contribution made. Examples: Joe Jones, chapter president,
is being reimbursed $10 for postage charges he incurred for a small mailing
to other leadership board members (logical); A check is issued to a local
restaurant for dinner for a leadership board meeting on a date for which
meeting minutes exist (logical); A check is issued to a local store for
‘supplies’ for $100 with no corresponding receipt and no mention in meeting
minutes that this expense was approved (requires clarification from the
leadership board).
Ending balances
Verify that the checkbook ending balance matches the balance on the Dec. 31
bank statement for the account (taking into account any checks that may have
been written that were not cashed by Dec. 31).
Chapter Summary Report
The Chapter Summary
Report is not meant to balance. A summary of the activities reported online
that contribute to each line total on the report is attached to the Chapter
Summary Report.
- The Audit Committee or independent auditor should compare the Chapter Summary Report with what was
reported online for a randomly selected group of activities. Have all meetings
been reported online? Have all activities had their final results recorded
online so they are appearing on the Chapter Summary Report? Please note
that it may be easier for the Audit Committee or independent auditor to review this report with
a few of the chapter leaders to determine if there are any concerns or discrepancies.
- After the audit has been completed, the Audit Committee chairperson or independent auditor must
sign the Chapter Summary Report and Group 990 Tax Return Verification (on
the Chapter Summary Report).
- A chapter leader must sign the Verification page and submit it to the
Operations Center in Appleton, WI, by Feb 28.
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Performance Audit
The Audit Committee should:
- Verify that chapter activities and meetings were reported online and that
expenses associated with meetings were accurately reported.
- Review chapter meeting notes to ensure that activities being reported
were voted on by the chapter leadership board and that minutes clearly reflect
which activities were approved and denied.
- Verify that meetings were being documented and that monthly meetings included
a report from the financial director, which contains beginning balance, a list of deposits, a list of checks written and ending balance.
Additional Topics
Chapter
meeting minutes
Chapter
Summary Report - instructions for using
Conducting
Year-End Audit of Finances and Activities
Depositing funds
raised - guidelines and requirements
Funds:
fair share - procedures when chapter can't access
Operating
funds — planning and appropriate uses