You may be surprised to learn that we can have as many as four audits per year at the Food Bank. This year we got lucky; we only had three! They are the regular financial audits we are all personally familiar with. Non-profits should have an audit every year, usually by a specialized CPA, if it collects donations from its members or the public in general. The audit certifies, in the opinion of a licensed, independent observer, that the books aren’t cooked and that what is represented in the financial statement is true and confirmed by the auditor.
The Food Bank also receives a federal audit, because any non-profit that receives more than $500,000 from the federal government, must be audited according to federal requirements. (We receive between $500,000 and $600,000 from the government.) We also have a regular, but not annual state audits from the Department of Social Services that administers the federal Emergency Food Assistance Program, and the California Association of Food Banks that administers the CalFresh (Food Stamp) Outreach Program. And of course, anytime we receive a grant, the grantor reserves the right to audit our records as they pertain to the intended purpose of the grant.
While there is a cost associated with these audits, imagine what the cost could be if audits didn’t exist? And what we sometimes don’t think about is what we learn from the audits. I have always found that audits 1. Cause me to be aware every day that our procedures are well thought through, recorded, and applied uniformly; 2. that when we do discover a gap in procedures, we learn about it and have the information to fix it; and 3. when we fix it, we have a greater trust in the ability of the audit to unearth poor practices or even fraudulent intentions. Audits are not fun. Sometimes it feels like auditors take great pleasure torturing us and catching us doing something wrong. We should welcome them as a necessary and beneficial link in building the kind of trust that is based in the verification of truth. It’s the context every society needs to function transparently and effectively. In order to show our transparency we have posted our previous audits, all you have to do is go to our website. (I hope our auditors read this.)