How to Conduct an Association’s Year-End Audit

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With the end of the year approaching, holidays often preoccupy our thoughts. However, in order to start the next year strong, it is recommended to take some time from the festivities to analyze the current year and get organized for the next.

Conducting a year end audit is a valuable exercise for association leadership.

What is a Year End Audit?

A year end audit is asking questions and providing objective answers that may benefit the association going forward.

Some examples of such questions include:

  • What were the financial gains?
  • What were the financial loses?
  • How many members were added to the association?
  • How many members left the association?
  • Do the financial receipts match with the recorded expenses?

The purpose of an audit is to gain a realistic and factual view on organization’s health and future.

If an association isn’t focusing on the details, it will never see any bad times coming nor know what caused any issues. Similarly, it won’t understand what is working and how to replicate the success, possible with improvements.

Two key thematic areas can paint a clear picture of your association’s health.

They break down into two areas: the budget and the people.

The Budget

To start off the next year right you have to know how the last one went with respect you the association’s budget.

Budget is about more than just making money. Take a detailed look at the association’s income and expenses.

When it comes to income, make sure every payment made to the organization was deposited. Go over bank records, financial statements, and deposit documentation.

Making sure the income is coming in keeps the association working.

Office space, utilities, new equipment, salaries and other things that cost add up to expenses. Make sure all balances due are paid and above all make sure your expenses don’t exceed your income.

A healthy budget means the association is in the black for the New Year and ready to go to work without existing expenses or lack of funds slowing them down.

The People

An organization is only as good as the people in it. Keep a membership audit keep of who is still in the organization, and of those, how many are regularly active?

Are you gaining more members than you are losing?

For people who have left the association, it helps to know if their tasks were successfully re-assigned and if they had any hard to replace skills. The loss of somebody with a unique skill set can be damaging and you’ll want to know this.

In cases of current people still with the association, make sure they are up to date on any necessary record keeping, such as continued learning credits. Above all, be certain they feel they are both gaining value from and adding value to the organization.