Touchy Audit Issue

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wrigjef
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Touchy Audit Issue

Postby wrigjef » Sat Sep 12, 2009 6:51 pm

As stake financial clerk I have been assigned to get an answer on a policy issue then craft a response to Bishops, clerks and auditors within the Stake. The issue was raised when an auditor wrote exceptions based on a ward not having the original receipt for an expense. We are familiar with the requirement to have a receipt included in expense documentation, we are also familiar with what the audit form says about when a receipt is not available. The question is if a photo copy is acceptable. My next step would be to craft a response that does not make this particular auditor feel picked on.

Guidance and suggestions are welcome.

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Postby lajackson » Sat Sep 12, 2009 7:17 pm

wrigjef wrote:. . . an auditor wrote exceptions based on a ward not having the original receipt for an expense. . . . The question is if a photo copy is acceptable.


Of course, having the original receipt is best. I would think, though, that even a photo copy of a receipt would be better than not having anything at all, where the bishop would then have to prepare substitute documentation explaining an expense. In my opinion, the copy of the actual receipt is better than substitute documentation, which would meet the requirement of the audit item. It would be helpful if there was a note stating why the copy was there instead of the original.

In this case of a single instance, if I were conducting the audit, all other things being right, I would mark the finding true. However, if there were a number of copies instead of originals, I would mark the finding false and require the ward to account for what they were doing. I would also mark the finding false if there were a number of instances of substitute documentation.

I realize that this is a bold item, and thus requires a great measure of followup on the part of the stake in reporting to the area, etc.

And at that point, the chairman of the audit committee would determine the best course of action, which I would expect to include training for a ward that was not consistently keeping original receipts, and training for an auditor who wrote up a bold finding for only one copied receipt, depending on the situation.

That's what I would do.

For your letter, you might just point out that the requirement is for an original receipt for each expenditure, and that substitute documentation might include a copy of a receipt, but that the ward should require members to bring in the original receipts if they want to be reimbursed.

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Postby lajackson » Sat Sep 12, 2009 7:21 pm

wrigjef wrote:My next step would be to craft a response that does not make this particular auditor feel picked on.


By the way, we pick on our auditors all the time. We also rotate them throughout all of our units, so that someone different goes out each time.

And we do a lot of training, too.

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Postby jbh001 » Sat Sep 12, 2009 7:59 pm

wrigjef wrote:The question is if a photo copy is acceptable.

lajackson wrote: In this case of a single instance, if I were conducting the audit, all other things being right, I would mark the finding true. However, if there were a number of copies instead of originals, I would mark the finding false and require the ward to account for what they were doing.
Hmm, I never realized that a photocopy of the receipt was unacceptable or at least not preferred. When the receipts are small enough to fit, I photocopy them onto our authorizations form so as to take up less space in the filing cabinet. I then either give the original receipt back to the owner (after stamping it "paid" and writing the date and check number on it) or shred it.

I also photocopy pre-printed remittance slips onto the form to use as the receipt since it contains all the information I think I need, but I can still then mail the original remittance slip with the check.

My thought was that physically incorporating the receipt into the authorization from via photocopying it onto the form meant that there was one less piece of paper that might get lost.

But this thread now has me wondering if that is an acceptable practice. FWIW, I have never been a stake clerk, and our stake auditors haven't raised it as an issue.

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Postby aebrown » Sat Sep 12, 2009 8:10 pm

wrigjef wrote:As stake financial clerk I have been assigned to get an answer on a policy issue then craft a response to Bishops, clerks and auditors within the Stake. The issue was raised when an auditor wrote exceptions based on a ward not having the original receipt for an expense. We are familiar with the requirement to have a receipt included in expense documentation, we are also familiar with what the audit form says about when a receipt is not available. The question is if a photo copy is acceptable. My next step would be to craft a response that does not make this particular auditor feel picked on.


As you said, the audit instructions are clear in what is required for a receipt, and what is required if a receipt is not available. Specifically, it says:

Every expenditure, including any advance given for any purpose, should have original receipts, invoices, or similar notices of amounts due or already paid. A check request document alone is not adequate. If an original receipt or invoice is lost, the substitute documentation should include a written explanation of the payment purpose, a statement or description of the goods or services acquired, the period the payment applies to, the name of the person who was assisted (for fast-offering payments), corroborating signatures (such as signatures of payees and beneficiaries), and so on.
While the original receipt is clearly desirable, it is also quite clear that substitute documentation is acceptable. A photocopy of the receipt would fit many of the requirements for substitute documentation. With an extra signature or explanation, it may well be entirely acceptable.

When I was an auditor, I would never mark an exception if the actual requirements of the audit step were met. As a stake financial clerk involved in training auditors, that is what I teach the auditors: read the entire audit step and apply the language of the audit step to the best of your ability. Don't add or subtract requirements beyond what is written.

Even if an original document is not available, unless an auditor can explain why the documentation provided does not meet the requirements listed for substitute documentation, he should mark the audit step as True.

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Postby RossEvans » Sat Sep 12, 2009 8:12 pm

jbh001 wrote:Hmm, I never realized that a photocopy of the receipt was unacceptable or at least not preferred. ...


Indeed, it is news to me that a photocopy is considered unacceptable. Could someone point to some manual passage that explains that?

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Postby jdlessley » Sat Sep 12, 2009 8:26 pm

I agree with most that lajackson said. As an auditor of more than four years I would consider the number of instances in which a photocopy was used and if the same individual is involved before marking the checklist item false. I would also ask questions as to why the photocopy was provided and not the original. There are acceptable answers. But as lajackson said the best course to avoid the questions and the potential for an audit exception is to annotate on the photocopy the reason it was provided.

The fact that substitute documentation is acceptable at all tells me that the requirement for the original has room for lenience. The call is really in the hands of the audit committee chairman.

The question that has to be considered in the followup is what corrective action or training is necessary to prevent another audit exception. Would the end result be that a member would not be reimbursed for a valid expense? I would hope not.
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Postby studentclerk-p40 » Mon Sep 14, 2009 7:15 am

wrigjef wrote: My next step would be to craft a response that does not make this particular auditor feel picked on.


My guess is that the particular financial clerk in this situation is the one that is feeling picked on.

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Postby russellhltn » Mon Sep 14, 2009 10:24 am

wrigjef wrote:My next step would be to craft a response that does not make this particular auditor feel picked on.

Guidance and suggestions are welcome.


"There has been some question as to what is the proper practice for documenting expenses. After researching the handbook, the stake will be holding units to the following guidelines ..."
Have you searched the Wiki?
Try using a Google search by adding "site:tech.lds.org/wiki" to the search criteria.

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Postby rexgj » Fri Sep 18, 2009 3:44 pm

Here's a situation I confront frequently. A member requests fast offering help, from the bishop, with his power bill. But the member can pay the current bill, but not the past due amount, so he makes a copy of the bill for the bishop, and he uses the original to send in with his bill. The copy of the bill is the only thing we have. I can't imagine this is not acceptable, and I have never been called on it during any audit, and I always have a few of these.


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