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Sample Audit Program

GENERAL ITEMS 1. Obtain pertinent financial information: a) monthly financial reports b) quarterly financial reports c) chart of accounts listing d) fiscal year-end trial balance report e) CARL system quarterly reports . #.

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Re!ie" pertinent financial information for any unique or unusual items relating to the field. Re!ie" pre!ious auditor reports and e!aluate findings: $o" often are audits on the field%s finances conducted& 'hen "as the last audit performed& (y "hom "as the last audit performed& 'as the audit adequate& 'ere past recommendations implemented& )f not* "hat "ere the reasons&

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Re!ie" the internal control questionnaire: 'hat are the field%s percei!ed internal control strengths& Are there any "ea,nesses that require additional audit testing&

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Obtain a copy of the .ational /taff 0ersonnel 0olicy 1anual 2if a!ailable). Obtain a copy of the 4ield Accounting 0olicy 1anual 2if a!ailable).

CASH 1. 5iscuss and document "ith the field treasurer the procedures for the recei!ing and disbursement of cash. a) sources of cash 2funds) b) frequency of deposits c) "ho ma,es the deposits d) the le!el of 6cash7 recei!ed e) the nature of documentation of e8penditures 2in!oices* chec, requests* agreements9) f) authori:ation procedures . #. 5etermine "hether the le!el of cash held in the field and in the office is appropriate. 4or petty cash funds )s an accurate petty cash !oucher maintained& Are physical cash counts a) Conducted routinely by a person or people "ho are not direct custodians of the petty cash funds& b) Reconciled "ith the petty cash !oucher& Can all !ariances be e8plained& c) 5ocumented by those people "ho performed the counts and reconcile these counts against the petty cash !oucher& )s access to petty cash funds restricted& 'ho has access to these funds&

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4or all field chec,ing accounts a) 5etermine the number of signatures required on each chec,. b) 5etermine the process by "hich cash is recei!ed for mission operations. c) Obtain ban, statements for each ban, account. d) 5etermine the frequency and timing of the preparation of ban, reconciliations. 'ho does the reconciliations&

e) /ummari:e a listing of deposits from the ban, statements and reconcile the amounts "ith reported home office transfers and other sources of income reflected on the field%s financial reports. f) Obtain ban, reconciliations and test for accuracy. g) ;erify "hether a second party re!ie"s ban, reconciliations monthly. <hese e8aminations should be documented "ith a date of e8amination and a signature of the second party. AMOUNTS DUE FROM OTHERS NOTES! ETC"# 1. 5iscuss "ith field treasurer the nature* purpose* and term of amounts due from others. 2<here is an e8pectation that the mission complies "ith cash base accounting standards). =8amine any note agreements. )f possible* !erify balance "ith the other party. 5etermine "hether the interest is being properly computed and collected on a timely basis. 5etermine "hether loans* ad!ances* etc "ere properly authori:ed by CRC personnel. =!aluate any personal account balances to determine reasonableness and estimated timing of collection.

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PROPERT$! E%UIPMENT! AND &EHICLES 1. 5etermine "hether the field o"ns any assets. 2Automobiles* land* buildings* office equipment)

5etermine "hether a listing of all assets o"ned is maintained. Obtain a copy Re!ie" for completeness 5etermine date of latest compilation ;erify "hether the assets are registered to CR'RC. )f not* state the reasons. 5etermine "hether the field has obtained adequate insurance on these assets. 4or any assets purchased* determine "hether proper authori:ation "as recei!ed. 4or assets o!er >1*???.??* obtain copies of the in!oices "hich adequately document the purchase. 5etermine "hether there is appropriate security o!er mission assets. <his includes documenting pre!ious history of theft. =!aluate computer system operations )s there appropriate technical support& 'hat is the e8isting practice of updating !irus protection& $o" often do system bac,-ups occur&

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ACCOUNTS PA$A'LE 1. . Are there any payables boo,ed& )f so "hy& 2<here is an e8pectation that the mission complies "ith cash base accounting standards.) $as the $ome Office been notified of any significant payables& RE&ENUES 1. . )n connection "ith the re!ie" of deposits in the cash area* reconcile the deposits to the receipts recorded on pertinent financial reports. )ndependently confirm "ith the $ome Office and other funding sources 2the amount and date of fund transfers). <hese amounts should reconcile to "hat has been reported by the field. 5etermine the nature of the !arious sources of receipts and any unusual recording procedures* entries* etc.

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E(PENDITURES 1. (y re!ie" of the chec, register for the prior months* select chec,s and re!ie" the follo"ing: Cancelled chec,s for agreement of endorsement* payee* amount* etc. /upporting in!oice for agreement of description* amount* date* and account classification. 0roper authori:ation in accordance "ith agency policy. Re!ie" the chec, register for the prior months and be particularly alert for unusual items such as Large amounts 0ayments to agency staff 0ayments to field treasurerAdirector or related persons 0ayments to ban,s 0ayments to indi!iduals List any items noted abo!e and follo" up by discussing "ith the field treasurerAdirector "ith the supporting documentation. 4or tra!el ad!ances* reimbursements* etc. a) 5iscuss procedures for reimbursement "ith the field treasurerAdirector b) /elect disbursements for detail re!ie" of support and determine "hether the documentation includes the follo"ing: 1) 'ho incurred the e8pense& ) 'hat "as the purpose of the e8pense& #) 'hen "as the e8pense incurred& +) 'here "as the e8pense incurred& -) 'hy "as the e8pense incurred& +. Re!ie" personnel e8penses for personal medical charges for e8patriate le!el staff. Agency funds should not be used unless "ith $ome Office authori:ation. <his authori:ation must be documented.

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OPERATING PROCEDURES 1. Re!ie" the missionBs compliance "ith the host countryBs la"s in regard to Country registration . 0ayment of local ta8es 2payroll* property* income* etc.) =mployment contracts "ith national "or,ers 1ission o"nership of property 2!ehicles* land* and buildings)

Re!ie" the fieldBs policy on housing. $o" is the housing assigned& $o" is the monthly rental allo"ance determined& 'hat housing e8penses do the mission assume& 'hat housing e8penses do the missionary assume& 5o any of the missionaries o"n their homes& )f so* "hat type of reimbursement is recei!ed from the mission& $o" is it determined& Obtain a listing of the present monthly payments made for missionary housing by the mission.

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4ield ;ehicle 0olicies $o" does the field determine if a !ehicle is necessary for the "or, of the missionary& 5o all missionaries on the field ha!e a mission !ehicle& )f some do not ha!e a mission !ehicle* "hy not& 'hat policy does the field ha!e regarding the replacement of mission !ehicles& $o" a!ailable* efficient* and costly is public transportation& )s the missionBs mileage policy being follo"ed&

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(udgeting and 0lanning 0rocedures $o" does the budget e!ol!e on the field& 'ho is in!ol!ed in the process& $o" are the appro!ed guidelines used in the process& $as the field prepared contingency plans* should decreases be needed& 'hat difficulties are e8perienced in the formulation of the plans and budgets& 5o field staff ha!e any suggestions on ho" to ma,e the procedure more effecti!e* efficient* and accurate& $o" does the field determined the e8change rate used for the annual budget if budgets are reported in local currency&

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Currency =8change 0rocedures 'hat la"s do the host country ha!e in regard to currency e8change& )s the fieldBs current practice in compliance "ith these la"s& 'hat are the current practices of the missionaries for obtaining local currency&

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Children%sB =ducation Assistance Obtain a listing of the tuition* fees* and boarding costs charged by each of the appro!ed schools. 'hat procedure is follo"ed in determining "hich school is appro!ed& )f boarding is needed* "hat are the choices& )nclude costs. 'ho

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<ra!el policies and procedures 'hat procedure is used in the purchase of international air tic,ets& purchases the tic,ets and "here are they purchased&

)s a price chec, made "ith the Crand Rapids andAor (urlington office to determine "here the tic,ets could be purchased for the least amount& $o" are personal international tra!el arrangements handled&

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1edical E 5ental 0olicies Any positi!eAnegati!e comments on the American or Canadian policies currently being used& 'hat method is being used by the missionaries to for"ard their claims to Cambridge or to the Canada office& 'hat medical costs are still being incurred by the mission& $o" are these being accounted for&

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/pouse =mployment by the 1ission 5id the field employ any of the missionary spouses& )f so* "hat policies go!ern the remuneration gi!en& 4ield =ducation E /piritual Retreat 5oes the field ha!e an education policy for its missionaries& 'hat policies go!ern the cost for the annual spiritual retreat& 'hat is considered mission e8pense and "hat is personal&

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Cost-of-Li!ing Allo"ances 5oes the field feel that ORCBs current cost-of-li!ing allo"ance accurately reflects the economic conditions "ithin the country& )f the field is currently conducting its o"n cost-of-li!ing sur!ey* "hen "as the last sur!ey conducted&

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.ational ChurchesAOrgani:ations Relationships 5oes the mission pro!ide grants to any these& )f so* "hat are the amounts& 'hat procedures and controls are used to ensure the funds are used for the intended purposes& Are grant amounts properly recorded on field financial reports and in the CARL system& 0C5-funded proGects must be recorded separately from CR'RC-funded proGects.

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(ene!olence 0olicy Are mission funds used to address the bene!olent needs of the community that the missionaries may face each day& )f so* is there a field policy&

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Audit 0lanning Are audits conducted routinely& 5oes the field alternate in the type of auditors used& 5oes the field coordinate "ith the $ome Office in its audit planning&

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Consult "ith the field%s legal ad!isors 2if any) <a8ation requirements /ale agreements <he details of maGor contracts <he details of housing agreements

Auditor E)aluatio*
Field a*d Name o+ E)aluator Auditor2s) .ame 5ate2s) of 4ield <esting 1. /pecify auditor type: A) Local A Regional Auditor () )nternational Auditor C) )n-field ;olunteer 5) .orth American ;olunteer =) $ome Office Auditor 4) Other . #. +. -. 3. @. $o" "ell did the auditor2s) and field staff communicate audit e8pectations& /core from 1 2poorly) to @ 2e8cellent). 'ere the field%s supporting documentation handled "ith care by the auditor2s)& /core from 1 2poorly) to @ 2e8cellent). 'ere inter!ie"s "ith field staff conducted in a professional manner& /core from 1 2poorly) to @ 2e8cellent). 5id the audit program used by the auditors adequately e8amine sampled financial data& /core from 1 2poorly) to @ 2e8cellent). 5id the auditor2s) communicate field audit status at routine inter!als during the course of the field audit& /core from 1 2poorly) to @ 2e8cellent). At the end of field testing* did the auditor2s) communicate auditor recommendations in a clear and concise manner& /core 1 2poorly) to @ 2e8cellent). 5o field staff find the audit recommendations helpful& /core 1 2poorly) to @ 2e8cellent). 'ere field staff able to gi!e feedbac, on audit recommendations& /core 1 2poorly) to @ 2e8cellent). 'ere field staff able to re!ie" a draft copy of the audit report before the report "as finali:ed& /core 1 2poor) to @ 2e8cellent).

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'hat "ere the o!erall strengths and "ea,nesses of the audit& 5oes the field ha!e suggestions that "ould impro!e the effecti!eness of future audits& 0lease "rite comments on a separate page.