Care with the Blue: Joint Audit Committee

We are nearing the end of the Executive Council reports in this series on the Blue Book. Today we turn to the Joint Audit Committee.

Summary of the Report
The Joint Audit Committee reviews our financial statements, reporting at least once a year to the EC. This includes overseeing our financial reporting processes, our audit, and our system of internal financial controls. They are given the authority to discuss any issues of concern which may arise with staff and board members and also, with EC's approval, to hire independent investigators and firms.

We received unqualified opinions from our indecent auditing firm for both the 2015 and 2016 financial years. The Committee also revised the Audit Committee Charter, given recent changes to New York State Law. They also created an Request for Proposals (RfP) process to select an auditor for the coming triennium. After reviewing submissions from five firms, they recommended remaining with Grant Thornton, LLP, the current audit firm.

The Committee discussed the possibly addition of an internal auditor to our church staff, someone who could work indecently of the committee and review areas of concern or risk. Given the advice of Grant Thornton, the committee decided first to engage in an enterprise risk assessment to help identify in which areas an internal auditor might be needed.

They noted the need for a comprehensive policies and procedures manual, one that would codify the various policies and procedures adopted by EC and GC. They also joined with the Investment Committee in encouraging a decrease on the draw from the church endowments, though they acknowledge that current returns have been able to sustain the higher draws.

The committee also recommended the creation of succession plans for key positions, to enable a good transition when there is staff turnover. Finally, they recommended that the current structure and governance procedures of our staff be evaluated to ensure that decision are based upon the strategy and mission of the church.

Reactions to the Report
This might seem like a boring report, easy to skip over, but it is actually very important. After all, it was in the late nineties that our church was in the news because the treasurer, Ellen Cooke, embezzled over $2 million dollars (bonus trivia, the judge her sentenced her was President Trump's older sister, a respected jurist). One of the ways she had succeeded in her crime was maintaining exclusive control over the church books and audit reports.

The careful work this Committee does is, thus, essential and should continue to be vigorously supported by EC. I cannot speak for sure on whether an internal auditor would be a help to our church's financial controls—but I trust the advice of the firm we contract with. Creating a policies and procedures manual is something that is important to have done. As I said yesterday, I am less interested in a decrease to our endowment draw, but overall I have nothing but praise for the good work this Committee has done.

Note: You can click here for a list of all Blue Book Reports & Resolutions that have thus far been reviewed.