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Additional Audit Information from the Head Auditor

Posted by Clubs & Societies on 13 August 2013

Congratulations to those of you who handed your January - June 2013 Audits in on Tuesday. If you were unable to submit them on time, please apply for an extension to C&S Executive.  Please be aware that the new marking scheme (introduced last semester) including the introduction of a Qualified Pass 2 will remain in place for this Audit period and for Audit periods to come. 

Cheques

There have been many queries already this semester regarding cheques written in previous periods that are yet to be banked. I have spoken to the on-campus banks (Commonwealth and Westpac), who clarified that cheques become stale after 15 months. That is, after 15 months they should not be able to be claimed if presented to the bank. For Auditing purposes, we will use 2 years as referenced in the Audit Handbook. This means that once it is determined that a cheque has gone 'stale' it needs to be written back as Income into the Audit. As there will be no corresponding income receipt for this cheque it must be clearly stated that it is a stale cheque. Please note however, in some instances where the cheque is deemed to be of a significant amount by the Head Auditor, it may be asked that a stop cheque still be obtained. 

Retrospective Financial Motions

In anticipation of the requirement for some clubs to retrospectively authorise financial motions, I would like to clarify some necessities regarding minute taking. 

Before a club spends money, the expenditure must be preauthorised at a quorate meeting of the club's full committee. For auditing purposes, each club must be able to show proof of the meeting at which the expenditure was preauthorised. It is therefore vital that financial motions are minuted correctly. 

In the event that expenditure was not preauthorised correctly, thenthe expense will need to be retrospectively authorised. In other words, another Committee meeting would be held and, if quorate, the expenditure may be retrospectively authorised. It is not acceptable for Minutes of previous meetings, specifically financial motions to be simply changed. This is deemed as falsifying Minutes. C&S stipulates that clubs preauthorise expenditure so that they stay within budget and minimise the risk of debt. 

Additionally, club Auditors have no choice but to assess the Minutes, as they are submitted/signed in. Any possible 'typos' will not be treated as such as it is not possible to draw a conclusion in a club's audit that a typo was made.  For Financial Motions to be correctly authorised they must clearly include:

  • Explicit dollar amount (either exact amount or maximum eg, up to $50) 
  • The full name of the person who is authorised to spend the money
  • What they will spend the money on
  • The method of payment - either to be paid by club cheque direct to supplier or payment by a member to be reimbursed by club cheque
  • The full name of the mover and seconder; and
  • Whether the motion was carried

In Chapter 4.1 of Treasurer's Handbook there are 2 perfect examples of how to correctly preauthorise expenditure and record in the minutes. C&S recognises, however, that the need to authorise expenditure retrospectively does arise. If a club committee needs to retrospectively authorise expenditure, please refer to the following example.

This example will be included in the new version of the Treasurers Handbook and will also be displayed in the Audit Office:

Motion
"That the committee retrospectively authorise Kathy Bates to be reimbursed $48.20 by club cheque for her purchase and payment of sausages, vegie burgers, bread, drinks and napkins for the Elephants are Great Barbeque."
Moved: Conan O'Brien.
Seconded: Max Weinberg
Motion CARRIED Unanimously

Bank Statements

I recommend clubs look into getting their bank statements emailed directly to the club email account.This will ensure your statements reach you faster and additionally will remove the complication of getting a duplicate if a statement is lost.   Please check club email accounts regularly as to ensure easy communication with your auditor. 

Goodluck with your Audits and if you have any queries please do not hesitate to contact me.

Kind Regards, 

Eliza Tipping
headauditor@monashclubs.org