Consultance Accounting Services
Not-for-Profit Bookkeeping Performance Checklist
How to Assess Your Organization’s Risks Regarding its Accounting Function, Internal Controls and Year End Audit Preparedness
The importance of having accurate financial statements and records is critical to the long term viability and success of your organization. Furthermore, the requirement to have strong internal controls and being prepared for your year-end audit are also critical to the overall success of your organization. Yet many organizations do not invest the proper amount of money and resources needed to satisfy their board requirements or properly prepare for the year-end audit.
And the risks are real: a poor audit opinion could put you at risk with your board as well as current and potential new donors to your organization.
Answer these questions, and then check your scores to see your organization’s risk level.
| 1. Does your organization have a comprehensive annual budget that includes sources and uses of funds for all aspects of operations? | Yes |
No |
I don’t know |
| 2. Are you confident in the accuracy of your financial statements? | Yes |
No |
I don’t know |
| 3. Does the finance committee have a detailed understanding of the annual budget? | Yes |
No |
I don’t know |
| 4. Does the board of directors formally authorize the annual budget and revisions to the budget? | Yes |
No |
I don’t know |
| 5. Are you financial statements prepared correctly for accrual accounting requirements? Prepaid Expenses, Accrued Costs, Deferred Revenues? | Yes |
No |
I don’t know |
| 6. Does your organization have proper internal controls in place to satisfy your year-end audit requirements? | Yes |
No |
I don’t know |
| 7. Do you regularly compare budgeted Income and Expenditures with actual Income and Expenditures? | Yes |
No |
I don’t know |
| 8. Does the organization have written policies and procedures for fiscal operations including procedures for processing payroll, purchases, accounts payable, accounts receivable, etc? | Yes |
No |
I don’t know |
| 9. Are actual processing activities consistent with written policies and procedures? | Yes |
No |
I don’t know |
| 10. Are you segregating “Restricted” vs. “Unrestricted” assets and tracking the related expenditures correctly? | Yes |
No |
I don’t know |
| 11. Do you have a process in place to properly allocate functional expenses correctly? | Yes |
No |
I don’t know |
| 12. Are you able to properly track In-Kind donations made to your organization to satisfy your year-end audit requirements? | Yes |
No |
I don’t know |
Based on your answers on the previous pages, use the chart below to rate your organization’s Bookkeeping Performance Score.
| If you answered “No,” or “I don’t know,” to: | Your Not-for-Profit Organization’s Bookkeeping Is: |
| 9 or more questions |
LOW PERFORMANCE – VERY HIGH RISKYour organization is likely to have serious risks in multiple areas regarding its accounting function, internal controls and year-end audit requirements. Consultance Accounting Services recommends that you begin immediately exploring ways to understand and reduce your organizational risk, including an assessment of your Accounting Function, Internal Controls and Year-End Audit Preparedness. |
| 6 – 8 questions |
INCONSISTENT PERFORMANCE – HIGH RISKYour organization could have significant risks regarding its accounting function, internal controls and year-end audit requirements. Consultance Accounting Services recommends that you begin exploring ways to reduce your organizational risk, including an assessment of your Accounting Function, Internal Controls and Year-End Audit Preparedness. |
| 3 – 5 questions |
ACCEPTABLE PERFORMANCE – MEDIUM RISKYour organization could be at risk regarding its accounting function, internal controls and year-end audit requirements. Consultance Accounting Services recommends that you explore ways to reduce your organizational risk, including an assessment of your Accounting Function, Internal Controls and Year-End Audit Preparedness. |
| Fewer than 2 questions |
HIGH PERFORMANCE – AVERAGE RISKYour organization has achieved a good start towards understanding and managing its accounting functions, internal controls and year-end audit requirements. Consultance Accounting Services recommends that you continue to explore how to reduce your organizational risk, including an assessment of your Accounting Function, Internal Controls and Year-End Audit Preparedness. |
Questions about your score? Contact Consultance at info@consultancellc.com, visit www.consultancellc.com/about-consultance/contact-us or call 301-301-1564.
Presented by Consultance Accounting Services
www.consultancellc.com
301-301-1564
