The audit process
The scene in the conference room is quiet. Tranquil, even, especially compared to the scene at the end of January when our annual audit was going on. Each year the MPN Research Foundation opens its books and doors to an independent accounting firm which examines the Foundation’s finances as well as its policies to ensure that we are on the up & up as we execute our mission of funding and promoting MPN research and advocacy.
In the office, the preparation for the audit begins about a month beforehand as our bookkeeping consultant prepares various reports ranging from our pledges and grants to our balance sheet and statement of cash flows. These reports are reviewed by our Treasurer and typically are included in the January board meeting so that the board of directors has a chance to look at them and ask questions before they are presented to the auditors.
The second phase brings representatives of the accounting firm to the office. While here, they ask questions, observe how we handle transactions and review our accounts. What they find eventually ends up in our 990, the tax form that all non-profits who take in over a certain amount must fill out annually. We file each year’s 990 and our annual report on our website.
Finally, the auditors return to their own offices where they prepare their own versions of the reports we also produce to make sure everything makes sense. They then present them to our finance committee for review before they (along with the 990) are accepted by the board.
Over the past several years the 990s ask non-profits to report more than just financial data. They also ask us to provide information on governance of the organization itself. While this extra effort adds work for auditors and MPN Research Foundation staff, it is one way to ensure the organization is a good steward of the public’s funds. The audit, along with charity watchdogs like the Better Business Bureau and Guidestar all provide a way for the public to vet the charities they entrust with their money. We are typically finished with the audit and 990 in the spring, so check back then to see how we rate.