Is your church considering a new building or in the need of additional funds for church renovations? If your church or nonprofit religious organization (501(c)(3)) is preparing to obtain financing through a bank loan, odds are that the bank you are working with will require a certified audit of your finances to ensure compliance with generally accepted accounting principles (GAAP). Furthermore, a certified audit will further assert that your financial statements are accurately presented.  Even when a bank doesn’t explicitly require an audit before a loan, having an external, certified audit for your church, conducted by a certified professional accountant, will increase the validity of your loan application and increase your organization’s chances of approval for the loan.

Does my Church Need a Certified Audit?

Church audits offer several benefits, including instilling confidence and trust with financial supporters, protecting financial officers of the church from unwarranted charges of mishandling of funds, and setting best practices for fiscal responsibility. If your church has an annual giving budget of $300,000 or more, most CPAs will recommend having a certified audit performed annually.

Additionally, if your church is preparing to present financial information to obtain a loan, a certified audit will most likely be required as a prerequisite. Even if not required, a certified audit can be extremely helpful. The audit process will allow the accountant to help you simplify your financial system so you will be able to explain it clearly to a lending organization, as well as compile your financial information in a format that is more easily presentable to the bank.

Certified Audits for Churches

During an external church audit conducted by a CPA, your auditor will evaluate your accounting controls, segregation of duties, insurance coverage, reasonableness of systems and procedures, and donor records that have stipulations attached to them. The auditor will verify and substantiate procedures that are conducted, such as third-party verification of cash, investment and debt balances, direct correspondence with creditors, physical inspection of assets, and sable testing of transactions, just to name a few. The audit should provide an objective overview of current processes and procedures and identify any material weaknesses or significant deficiencies in the internal financial controls of your organization so that they can be corrected.

Certified Audit Services in Augusta, GA and the Southeast

An outside, certified audit is not uncommon when complying with bank loan covenants for a new building or to assess the status of fund-raising efforts. If your church is considering an audit for loan purposes, to comply with church by-laws, or to simply improve internal controls and efficiency, contact The Baird Audit Group to find out more information on how to get started.