A well-known not-for-profit had difficulty completing its annual independent audits in a timely manner. This is a common challenge faced by not-for-profits, which often have restricted resources, with staff focused on day-to-day, tactical activity. Yet such audits, which require the time-consuming collection of financial data and development of working documents, may be essential for successful fundraising.
Approach & Solution
Audits are considered a “best practice,” evidence that finances are being handled according to accepted standards and, even if not always required by law, may be demanded by a not-for-profit’s board members in order to meet their fiduciary responsibility. Publicly available audit reports communicate a commitment to transparency and professionalism.
As a result, many foundations and other funding sources require audited financial statements as part of their grant process. Donors may be explicit about how they want their contributions used and need to know that procedures are in place to ensure that their intentions are honored. As a result, charity watchdogs factor in the performance of yearly independent audits when rating not-for-profits.
It was clear that delayed audits were not in this not-for-profit’s best interest, but CPAs from Hart Vida & Partners were able to help turn the situation around. They acted as intermediary, collaborating with the client’s staff to collect and organize the financial information needed by auditors. As a result, the audit was completed several months earlier than had been the case the previous year. The client was so pleased that they have now engaged Hart Vida & Partners to work with them on an ongoing basis in order to further streamline the process.