Approved by corporation board of The Episcopal Diocese of San Diego on December 7, 2013
All churches will conduct an annual audit. In years when a different type of audit is not required per the guidelines below, a committee audit is required.
- Requirements for external audits:
Revenue includes all revenue from church, school, thrift shop or any other parochial organization.
- Churches with revenues greater than $2 million: Every other year with audit review in intervening year
- Churches with revenue between $1.5 and $2 million: Every third year with audit reviews in intervening years
- Churches with revenue between $1 and $1.5 million: Every fourth year with an audit review in one of the intervening years
- Churches with revenue between $500,000 and $1,000,000: Audit or Audit review every fourth year with diocesan review in one of the intervening years
- Parishes must have an external audit or external audit review combined with a diocesan review for the year in which a rector, vicar, or priest in charge leaves
- Churches with any of the following are subject to a Diocesan audit team review:
- Every 4th year for churches with less than $500,000 in revenue
- During administrative transition (part time clergy, treasurer, parish bookkeeper/administrator unless an external audit was done within the last year.)
- Churches that did not submit any audit prior year
- Each February, identify which churches are doing internal audit, audit exchange, diocesan review or external audit.
- Beginning with submission of the 2012 report, churches must submit with their parochial report the financial statement covering the same year and a reconciliation of one to the other. The Reconciliation Form will be provided. They must also submit their current budget. Parochial report training will be offered in January of each year.
- Conduct internal audit training each spring.
External Audit: A complete audit conducted by an outside Certified Public Accountant (CPA)
Audit Review: A review of the financial statements conducted by an outside Certified Public Accountant (CPA). Typically, an audit review does not offer the same depth as an outside audit nor does it usually provide an internal controls review. As such, it does not meet the requirements set forth below for churches that are required to have an external audit but can be used in place of a committee audit. Audit reviews must use the agreed upon procedures checklist provided by the diocese.
Committee Audit: Audits that are conducted by committee. There are two types of committee audits.
- Internal audit — a committee audit that is done by its own church
- Audit exchange — a committee audit done on another church in exchange for that church conducting a committee audit on yours
Diocesan Review: This is an audit review conducted by the diocesan audit team. It is not as thorough as an external audit and does not take the place of one.
Compilation of financial statements: This term is used by accountants to denote their work in publishing year-end financial statements. It is not an audit or an audit review and is unacceptable in meeting the requirements of an annual audit.
The diocesan audit standards task force originally implemented guidelines for annual audits for 2011. The revised standards allow an audit review in some cases when a complete external audit was required.
Audit Workbook 2022
Coming in February, 2023