Audit

Yes we have passed our audit! Collective sighs of relief all round. Many people don't realise that if don't pass this we will have to pay back funding, which could be thousands of pounds. This has led to charities folding when they don't have the money to pay back funding. Thats fair enough if the charity hasn't spent the money properly, however even if it isn't their fault, if they can't produce the receipts, invoices and bank statements then they have to pay the money back.

On our last audit, one of the auditors told me about a charity that had stored their records in a basement and had then been flooded. All of the records were destroyed. So they had to pay the funding back when the auditors came! The official view is it is the organisations fault as they should have found somewhere to store their records that wouldn't have got flooded.

Audit

Spending this afternoon preparing for an audit. We get funding from loads of different places including Europe and the Government. Lots of these people insist on auditing us, often years after a project has finished. Later this week someone from Government office is coming to audit a project that finished 3 years ago.

When they audit they look at all of our finances for 1 month of that funding to check that we have a receipt for each purchase we have made, that this is properly accounted for in our internal systems, and that this matches up with both cheque stubs and our bank statements. As they trace even small purchases such as a pint of milk, this can take a long time.

The second bit of the audit is looking at our outputs. For each bit of funding we usually have so many outputs to achieve e.g. number of children attending an event or number of people trained. At the audit we have to provide proof for each of the ouputs. As we have a system to collect this proof or evidence each month for all of our different streams of funding this won't be difficult to show at our audit.

But all of this auditing and monitoring takes time from our staff.