The Camp Audit
“Keep your friends close and your
auditor closer”
Topics for Discussion
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Determining the need for an audit
Other levels of reporting by CPA’s
Hiring the auditor
The RFP process – interview and selection
Audit Process – before, during and after
Issues that may arise
Other requirements
Determining the Need for an Audit
• Audit - express an opinion on financial
statements based on sufficient and
appropriate audit evidence
• Usually required by a third party
– Government agency, funding source, banking
relationship, internal board oversight
• Some situations may not require an audit
Other Levels of Reporting by CPA’s
• Review reports - A review is substantially less
in scope than an audit and does not express
an opinion.
• Compilation reports - do not express an
opinion or provide any assurance.
• Tax filing preparation
• Consulting reports
Hiring the Auditor
• Typically done via a Request for Proposal (RFP)
• RFP solicits responses from several possible
audit firms
• Responses are reviewed by management and
Board of Directors
• Final interviews are conducted
• Selection is typically made by the Board
The RFP Process
• Request summary of industry experience with
other similar organizations
• Outline end product requested: audited
financials, Form 990, meetings with Board and
Committees, any specific third party
(government) requirements
• Request references
• List of engagement staff and their credentials and
training
The RFP Process
• Request confirmation of licensing in the state you
are located
• Request a copy of the audit firm’s most recent
Peer Review Report
• Outline time line and due date for all
commitments
• Outline fee arrangements and consider multiyear commitments
Interview and selection
• Discuss the firm’s relevant experience
• Discuss the firm’s philosophy for communication
with management and the Board
• Involve members of the Board and management
in the selection process
• Make sure you have enough lead time before
your year end because a change in auditors
requires time and effort for all parties involved
Planning the Audit
• Meet with the firm selected to plan out a
timeline and select fieldwork and meeting dates
• Read and sign an engagement letter (contract)
• Have the auditor provide a list of documents for
the Camp accounting staff to have prepared in
advance
• Make sure the preparation gets done in advance
During the Audit
• Make sure Camp staff have time available to
meet the auditors needs while they are on site
• Be ready to respond to additional requests
during audit field work
• Suggest an exit conference with the audit
team to review and update timeline and “to
do” list
Wrap Up and Conclusion
• Be sure to review and discuss drafts of the
financial statements that the auditors will provide
– see sample
• Schedule meeting dates with the Committees and
the Board to provide time for questions and
possible changes to reports
• The Board will approve the financial statements
once agreed to and presented by the auditors
Issues That May Arise
• Audit adjustments to the financial statements
• Preliminary results may not match final results
• “Going concern” issues – if the Camp has a
difficult financial situation
Other requirements
• Any specific third party reports – may be
government reports
• Preparation and review of tax form 990 –
typically also prepared by audit firm
• Board review and approval required
• A few words on Form 990 T
Standard Audit Report
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors of
ABC Organization
Report on the Financial Statements
We have audited the accompanying financial statements of ABC Organization (a nonprofit organization), which comprise the statement of financial position
as of June 30, 20X1, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the
financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally
accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected
depend on the auditors’ judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the Organization’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Organization’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Standard Audit Report Continued
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of June 30,
20X1, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Report on Summarized Comparative Information
We have previously audited the Organization’s 20X0 financial statements, and our report dated October 2, 20X1, expressed an unmodified opinion on those
audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 20X0, is
consistent, in all material respects, with the audited financial statements from which it has been derived.
City, State
Report Date
Statement of Financial Position
20X1
20X0
LIABILITIES
20X1
20X0
ASSETS
Cash and cash equivalents
$ 29,907
$ 15,655
Unconditional promises to give
198,188
190,304
Accounts receivable
4,635
1,355
Prepaid expenses
6,402
8,845
64,875
13,282
648,410
664,342
$ 952,417
$ 893,783
Long-term investments
Property and equipment
TOTAL ASSETS
Accounts payable
$ 6,291
$ 3,445
Accrued expenses
4,284
8,145
Notes payable
79,991
85,930
TOTAL LIABILITIES
90,566
97,520
Unrestricted
362,857
356,166
Temporarily restricted
492,125
435,932
Permanently restricted
6,869
4,165
861,851
796,263
$ 952,417
$ 893,783
NET ASSETS
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
Statement of Activities
Unrestricted
Revenue and support
Government contracts
Contributions and special events
Grants
Services and fees
Other revenues
$
Net assets released from restrictions
Total revenue and support
Expense
Program
Management and general
Fundraising
Total expense
Change in net assets from operations
Investment income, net
Change in net assets
Net assets, beginning of year
Net assets, end of year
$
Temporarily
Restricted
Permanently
Restricted
$
$
1,265,431
400,301
53,879
21,652
5,674
64,823
13,751
-
Total
20X1
20X0
2,704
-
$ 1,265,431
467,828
67,630
21,652
5,674
$ 1,062,785
362,791
65,430
26,753
4,568
23,756
1,770,693
(23,756)
54,818
2,704
1,828,215
1,522,327
1,230,421
467,935
82,364
1,780,720
-
-
1,230,421
467,935
82,364
1,780,720
943,376
443,991
79,212
1,466,579
(10,027)
54,818
2,704
47,495
55,748
16,718
1,375
-
18,093
15,314
6,691
56,193
2,704
65,588
71,062
356,166
435,932
4,165
796,263
725,201
6,869
$ 861,851
$ 796,263
362,857
$
492,125
$
Thank You!
Howard Cheney, CPA
hcheney@mbkcpa.com
(413) 322-3491
Melyssa Brown, CPA
mbrown@mbkcpa.com
(413) 322-3484