Auditor Tips: How to Prepare for an Audit

auditlNow that the rush of year-end is starting to come to a close, it is time to gather your information together from ALL of last year in anticipation of your annual audit.  Whether you are a community that has an audit done every year or every two years there are some things you can do to make your auditor’s visit easier for everyone involved.

Most political subdivisions have an audit conducted every year.  Some regulations only require an audit every two years.  Keep in mind that federal or certain state funding programs may require an annual audit.

Audit preparation begins before the end of the year.  Be sure all year-end work is completed (transfers, budget amendments, etc.). The following is a general list of items to have available and in order for your auditor:

  1. Bank Statements: Have all bank statements balanced and in order through the most recent month of the current year
  2. Vouchers, Paid Bills, Claims: Be sure all paid bills are in order with no missing check numbers
  3. Record of Proceedings: Minute Book
  4. Pledge of Securities: Have records of pledges current and for the prior year
  5. Investment Schedules: Have investment records for all CDs, savings accounts, etc., with current interest recorded
  6. Debt Schedules: Have any schedules for bond payments, lease agreements, and loan schedules available
  7. Debt Agreements: Provide copies of any new lease or loan agreements you entered into since your last audit
  8. Depreciation Schedules
  9. Accounts Receivable: Have a record of any funds due to city, utility billing records, etc.
  10. Payroll Records
  11. Ledgers/Journals/Financial Records for the Full Year and Summary of the Year
  12. Approved Budget for Audit Year and for the Current Year
  13. Schedule of Budget Amendments made During Audit Year
  14. Record of any Federal Funds Received During the Audit Year
  15. Any Policy Manuals
  16. Last Audit Completed if not Completed by Current Firm Conducting the Audit