Over the past month we have looked at various aspects of a nonprofit audit. Being prepared with software systems, independent audits and checklists to keep information organized are at the top of the list to not only survive but thrive during the audit experience. But after the audit has been completed, you are not quite out of the woods. There are a few follow up tasks that if left undone can create added stress for the nonprofit accounting team.
The management letter is a review of the operations or procedures that the auditors identified as deficient. Since most auditors work with a variety of nonprofits, they have a good working knowledge of best practices for organizations and can give wise advice on bringing deficient areas up-to-par. Their suggestions can help streamline your organization, which will make it run more efficiently. Sometimes the staff in charge of the audit might ask to review a draft of the letter before it is sent to the board to verify the information because deficiencies in the accounting of a nonprofit organization, will cause anxieties in the board of directors.
What Can We Do to Correct Deficiencies?
If the auditors have spotted any deficiencies, it is best to start correcting them immediately. Eliminating deficiencies will only make your nonprofit stronger, it will also demonstrate the integrity of your organization. After the auditors have shared any concerns or red flags that were signaled by the audit, it is important to sit down with the management of your nonprofit to discuss not only the needed changes for the organization, but also the overall satisfaction with the auditors.
Is Your Organization Satisfied with the Auditor’s Work?
It is very important for your organization to be satisfied with the scope, nature, and timing of the work of the auditors. Did you feel that the auditors had the skills and knowledge to efficiently conduct the audit? Did the auditors work with the staff with minimal disruptions to the workflow of the office? Did the auditors work diligently on the review? (Read more auditor satisfaction questions available at the National Council of Nonprofits website).
Beck & Company has been in the business of helping nonprofits succeed with a broad base of managerial accounting and systems experience for over 25 years. Our understanding of business practices and technology will help you solve nonprofit accounting organizational challenges. We have a commitment to the highest standards of integrity and quality. Call us today at 703-834-0776 for a consultation to streamline your accounting methods. We can help you start preparing for your next audit to ensure an even smoother process the next time. Sign up today for one of Beck & Company’s upcoming convenient, informative webinars that will help you focus and solve many of your accounting growth challenges.