Does your church need an audit? - Word&Way

Does your church need an audit?

“Good accounting records and good stewardship go hand in hand,” said the Evangelical Council for Financial Accountability. “Your church is the trustee for the money it receives — handle it carefully.”

Nick DavisNick DavisA financial audit is an examination of a church’s financial records and reporting activities. The auditor will check for accuracy and full representation of financial activities and claims. Every church should audit its finances as an approach of transparency to the church family.

Audits can be performed either externally or internally. External audits are done by an independent auditor who has no prejudice with the church and can review procedures with maximum objectivity. Since an external audit is a professional service contracted with a qualified auditor, it involves a cost. Internal audits are generally performed by church members or persons closely associated with the church, who may form an audit committee to execute an internal audit.

Verify if your church has had an audit before. Smaller churches may not need an annual audit but a regular, consistent audit of financial procedures is important for every church. The bylaws of some churches require it. Another matter to consider is the size of the church staff and the complexity of accounting procedures. If is has a large staff and budget, or accounting processes are complex, it may be asking too much of a volunteer committee. In such cases, an external audit is worth the expense.

Sometimes a change in staff leadership requires an audit. Beth Garner, minister of administration and mobilization for First Baptist Church, Lee’s Summit, Mo., encourages, “If there has been a change in either senior pastor or the position with the most financial control (church administrator, finance assistant or church treasurer), then it is good procedure to have an audit performed.” Most staff departures are not due to illegal purposes. But Jay Seaver of Seaver and Forck, CPAs, cautions, “If there has been an unexpected change in staff, an audit may be necessary to determine that the departure wasn’t due to a fraud being carried out.”

Psalm 115:16 says, “The heavens are the Lord’s heavens, but the earth he has given to human beings.” In 1 Corinthians 4:2, Paul reminds us that “it is required of stewards that they be found trustworthy.” An audit is a necessary discipline of making sure God’s business is being done with honesty and transparency.

Nick Davis is eastern regional vice president for the Missouri Baptist Foundation.

The finance column, written by staff and representatives of the Missouri Baptist Foundation, is a regular feature of Word & Way’s print edition.