SCHOOL INFORMATION If consolidated/merged school, list supporting parishes

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1 SUMMARY Report number Requested by Field work performed by Reason for review Date fieldwork started Auditing as of: Additional copies to: Date draft mailed Date received Frank's comments Date received pastor's comments Date final report issued Due date of pastor response Pastor response received Date acknowledgement letter mailed Updated Audit Committee Summary Updated Work In Process Listing PARISH INFORMATION Parish Name Parish Number Pastor Length of assignment Been pastor previously? Where? Business Manager (If applicable) Bookkeeper Number of active parishioners Accounting software used QuickBooks password SCHOOL INFORMATION If consolidated/merged school, list supporting parishes Number of students (K-8) Current Year Previous Year Tuition Payment Methods (Check all that apply) FACTS (Required?) Annually (Discount offered?) Semester (Discount offered?) 1 of 17 General Information

2 Monthly payments to parish INITIAL ASSESSMENT How long has bookkeeper been employed? Does (s)he appear qualified? Timely submissions of back-ups to parish support? Current on Consolidated Billing? (check w/ Darlene Doerr) Current on Health Insurance? (check w/ Mike Puetz) Current on retirement contributions? (check with GBS) Active Finance Council? How many members? Obtain listing. Did the parish complete a budget? Is the budget compared to actual? Has the parish had an internal audit? Were the changes implemented? Review chart of accounts - unusual or excessive? PARISH WEBSITE Does the parish or school have a website? Reveiew the website for inappropriate or illegal activities. (i.e. innurement, "mall" commissions, vehicle donations, etc.) 2 of 17 General Information

3 Cash (Including SLAF) WP # Obtain copies of all bank statements and reconciliations Are all accounts reconciled? Main account(s)? Organizational accounts? Is the reconciliation completed properly? Is the bookkeeper printing off the detailed bank rec? Does the rec contain old outstanding items? Review bank statements & cancelled checks - If checks are photocopies, are they legible? - Is the pastor (or clergy) signing checks? - Does the parish use a signature stamp? Review payees on checks - Transfers to other accounts? (name) - Checks made out to cash? (memo) - Employees/individuals regularly? (name) Does pastor get the statements unopened (mailed to the parish)? Is the monthly activity recorded timely? Main account(s)? Organizational accounts? Do previous reconciliations agree to G/L? Any "Balance Adjustments"? - Posted to what accounts? Is restricted/designated cash segregated on the Balance Sheet? Does the parish use a credit union? List all unrecorded cash/slaf accounts: From Attachment A $ - 3 of 17 Assets

4 Cash Confirmations - Send bank confirmation to each bank. - Request search for unknown bank accounts - Any unusual findings from confirmation? Cash - Other Note: Mass Stipend, St. Vincent de Paul & Scouts should NOT be recorded in QuickBooks. Obtain one month's bank statement of mass stipend account Separate checking account? Reconciled to mass intention book? How often? By whom? Review Petty Cash account Is the balance reasonable? How are reimbursements recorded? Are there physical cash controls in place? Cash Reserves: Are all excess funds on deposit at SLAF? How much is held in reserves? (Dollars and months) Restricted Fund Accounts Recording interest & earnings timely? Recording contributions as endowed gifts? Where are restricted fund contributions recorded? Outside Investments Any non-archdiocesan investments? (Stocks, CDs, Money Market, Savings) Note: Copy all documents relating to outside investments. Accounts Receivable - Tuition Is QuickBooks used to track A/R? If not, how is tuition tracked? Print out A/R Aging Report as of audit date. How is tuition billed in QB (monthly, annually)? If consolidated or merged school: Parishes in accounts receivable? How often are A/R balances reviewed? Outstanding balances written off regularly? Use bad debt expense? (If no, what account?) Note: Parish should bypass undeposited funds when recording payments received. 4 of 17 Assets

5 Accounts Receivable - Other What for? Any loans to employee or parishioner? Pledges Receivable Are capital campaign pledges recorded in the financials? Certificate Program How long has program been in place? Who operates program? How is inventory & profit tracked? How many vendors offered? Inventory: - Recorded in financial records? - How often is activity recorded? - Recorded at face value or cost? - Is a perpetual inventory record maintained? - Is the record reconciled to physical inventory? - How often and by whom? Profit: - Is the profit recognized at net? - Is the profit recorded as fundraising revenue? - How much profit made in last quarter? Last year? Inurement - Who benefits from program? Parish/School/Family? Annual Archdiocesan Assessment Reported as prepaid asset in QuickBooks? Recording full amount at July 1? Expensing 1/12 each month? Is the balance reported correct? Employee Health Insurance Does the balance appear reasonable? (should zero-out monthly) Are both the employee & employer portions recorded? Are premiums paid timely? (See Personnel Audit Program for additional procedures.) Prepaid Expenses - Other What for? Are contracts being expensed monthly over life? 5 of 17 Assets

6 Accounts Payable Using A/P System in QuickBooks? Paying bills timely? Debit balances in A/P? Print A/P listing as of audit date. If not in QuickBooks, review open invoices. Payroll Withholdings Balances appear reasonable (should zero-out)? Paying withholdings timely? Review accounts listed - any unusual accounts? Note: Only clergy are allowed annuities. Special Collections Payable Balances appear reasonable? Are the collections being remitted timely? Review accounts - any other than Arch collections? Due to Archdiocese - Annual Assessment Reported as separate liability in QuickBooks? Recording full amount at July 1? Recording only actual payments made? Is the balance reported correct? Due to Archdiocese - Other What for? Reported correctly? Prepaid Tuition Is the parish reporting prepaid tuition? If reporting prepaid tuition: Recording all payments received by June 30? Transfer to revenue/deferred support at July 1? Recording payment in A/R before invoice billed? Deferred Support Recording tuition payments made in full after July 1? If accrual basis, recognize prepayments on July 1? Recognize balance ratably over year? Note: If cash basis, will not use this account. Cash Exchange Liabilities/Equity

7 How many cash exchange accounts reported? Review account detail: True cash exchange transactions? Credit Cards Does the parish have credit cards? List credit cards/vendors. Obtain one month's credit card statement Review purchases - any personal expenditures? Note: Parish should never pay directly on individual's account. Note Payable to Archdiocese Is loan recorded in QuickBooks? Is the balance reconciled to SLAF statement monthly? Recording only principal activity? Recording interest expense as incurred? Note Payable - Other Does parish have outside debt? Obtain copies of any related documents available. Retained Earnings/Fund Balance Review financial statements - multiple equity accounts? Using the Opening Equity Bal account? Liabilities/Equity

8 Unrestricted Revenue - Offertory Collections WP # Review several months of collections by week in QB. Decreases from week to week? Any unusually high or low weeks? Any inconsistencies or unusual trends? Is anything removed from the collection? If yes, please list: Electronic Giving - Using 3rd party (provide name) or doing in-house? - Obtain a periodic report. - Proper security over bank account numbers? - Do Contribution statements break out electronic gifts from non-electronic gifts? Offertory Count Procedures Does the parish use sealed bags when $ is collected? Is the collection secured in a safe after masses? When is the collection counted? Are count teams used? How many counters per team? Do count teams alternate? Any members of count teams related? Any members also parish employees? Are count sheets used? Obtain copy (completed). Are count sheets completed in ink? Are they dated and signed by all members? Does the count sheet offer adequate detail? Who prepares deposit ticket? Who makes deposit and when? Who records deposit in QuickBooks? Who records deposit in Servant Keeper? Is the SK report reconciled to the count sheet? Does the parish track collection trends? Unrestricted Revenue - Other Are non-offertory donations recorded separately? Are parish organization gifts recorded as revenue? Review account for known activity. Restricted Revenue Are capital campaign revenues reported separately? Review account detail for: Restricted envelope contributions? Parish designated gifts? 8 of 17 Revenues

9 Is the cash segregated? How are the restrictions managed? 9 of 17 Revenues

10 Tuition Revenue Does the parish use the cash or accrual basis? Is the parish recording gross tuition charged? Grants and Allowances as contra-accounts? If accrual basis, when is tuition invoiced? Is prepaid tuition recorded separately? Does principal or pastor grant "special arrangements"? How is tuition tracked? Review for scholarships: Awarded to school to disburse? Scholarship revenue. Awarded to specific student? Apply to A/R. WP Ref Registration/Textbook Fees When does Registration start? Are fees invoiced through A/R? If necessary, recorded as prepaid fees? Cafeteria Revenue Does school have a cafeteria? Is the cafeteria program outsourced? If in house: Is there a cafeteria manager? Separate checking account? Recorded in books? How is money collected? Does cafeteria personnel use cash for purchases? Who prepares deposit? Who makes the deposit and how often? Does school receive state funds for milk? Other Program Fees Do f/s include votive revenue and stole fees? Any unusual items? How often deposited? Who counts and deposits? Grants From Archdiocese List Archdiocesan grants received: Note: Today and Tomorrow is not an Archdiocesan Grant 10 of 17 Revenues

11 Grants From Archdiocese - continued Insurance Claim Reimbursement? Sale of closed/merged property? WP Ref Grants From Parishes Monthly donations? Education subsidy for children in school? Are funds restricted/designated? Grants From Other Sources Local business grants? From who? Matching gift? From who? Are the funds restricted? Government grants? Other reporting requirements for the funds? Other Investment Income Non-Archdiocesan Investments? Rental Income From the Parish Hall/Church/Other? Is there a formal rental agreement? Does the parish lease any property? Is this continuous income (lease)? Sale of Property Record gross proceeds? How much? Fundraising Revenue Reporting revenues at net, not gross? Issuing 1099s to raffle/prize winners over $600? Does the parish use sub-accounts for different events? Groups? i.e. Scrip/Auction/Fish Fry/Parish Picnic, etc. 11 of 17 Revenues

12 General All employees on payroll? (PSR, cooks, playground monitors, cleaning, etc.) Export payroll summary by employee for one month to Excel. Calculate the retirement benefit. Do all eligible ees get 5%? Calculate the total HI premium per employee. Do they all agree to the HI statement? Calculate the HI benefit paid by the ER. All at 75% or 85%? Do all teachers, principals, etc have contracts? Do the contracts agree to the annualized salaries? Does the parish offer/require direct deposit? Accounting Are salaries broken out by job classification? Review wage accounts: Any unusual items through salaries (AP checks)? Review payroll tax accounts - unusual items? Review employee benefits accounts - unusual items? Health Insurance Expense - paying other entities? Health Insurance Expense - paying individual? Review Other Fringe Benefits - what for? Priests Accountable Plan-submitting actual expenses? Does the parish issue Christmas/Easter bonuses? Are all bonuses/additional comp paid through payroll? 12 of 17 Personnel

13 WP # of 17 Personnel

14 Supplies WP # Review account detail: Transactions recorded in appropriate account? Fundraising supplies at net with revenue? Household & Other - unusual or excessive items? Janitorial - supplies only? Janitorial - include contracted services? Textbooks - appear reasonable? (s/b major exp) If not, is another organization paying bills? Instruction - payments to teachers? If so, requiring receipts? Is the parish reimbursing sales tax paid? Fees & Services Review Professional Fees/Extra Clergy expense: Recurring priests? Issuing 1099 if over $600? Incurring Bank Service Charges? (unnecessary exp) Review Contributions Expense: Actual contributions? Tuition payments to other parishes, high schools? Review Cash Shortage(Overage) (s/b minimal activity) Review Parish Service Appreciation: Christmas/Easter bonuses? Employee retirement gifts? Other? (specify) Occupancy Review Contract Services: List types of contracted services: Review Rent - Equipment: List types of equipment rental: Review Utilities accounts: Created separate accounts for school, parish, etc? Allocated using classes? Appear reasonable? Unusual transactions? Review Repairs & Maintenance accounts: All normal, recurring expenses? Unusual transactions? 14 of 17 Expenses

15 Transfers - Arch/Parish/Other Consolidated Billing: Allocated to exp accounts (insurance, education)? Allocated by class? Consolidated Schools: Is Parish part of Consolidated school? Review account - only subsidy payments? Other Parish - Education: Review account - only subsidy for merged school? Arch-Interest/Rev. Fund: Review account - interest expense as incurred? Arch-Special Collections: Review account - parish contributions only? WP Ref Capital Expenditures Review detail of accounts: Purchase of a new assets? Repairs that increase the life of the asset? Capital expenditure in excess of 3% of revenues? Obtain approval from Archbishop? Expenses related to Capital Campaign? (See Capital Campaign program for procedures.) 15 of 17 Expenses

16 Pre-Campaign (All items must be in writing - obtain copies of all documentation.) WP # Define scope and nature of project? Obtain Archbishop's approval of project? Obtain approval of Development Office? Conduct feasibility study? Obtain Archbishop's approval for capital campaign? Loan approval from SLAF? 50% of cost of project on deposit? Pledges from parishioners for remaining cost? Does the projection/budget include overruns? Capital Campaign (CC) Activity All activity recorded in QuickBooks? If not, how? (Obtain copy) Is there a SLAF account for the CC? Are CC donations transferred timely to SLAF? Are pledges tracked in QuickBooks? If not, how? (Obtain copy) How are revenues recognized - cash/accrual/other? Did the parish expense initial development fees? Are capital expenditures recorded as incurred? Is the Note payable from Archdiocese reported? Expected cost of project at start? Change orders to date? Current expected cost of project? Construction completed? Project on schedule? Capital Campaign Complete Any outstanding bills? Is the parish still receiving donations? Is the parish actively collecting the pledges? Is the parish making payments on note? (Principal and interest or interest-only?) 16 of 17 Capital Campaign

17 Tuition Rates & Cost of Education WP # Calculate average tuition (total collected/#of students) Unallocated expenses: Consolidated billing: Occupancy: Other: Expenses paid by other organizations: PTA/Home & School: School checking account: Other: Total "Extra" school expenses Calculate subsidy: Total parish subsidy Subsidy per student Percentage of cost covered by tuition Review enrollment figures - trend? Does the parish subsidy appear reasonable? Too high/low? Possible reasons? Financial Trends Review Net Profit/Loss for past three years: Review Offertory Collection trends: Any major changes in parish activity? Has the parish been drawing on reserves consistently? Has the parish quit paying certain vendors? Possible areas of future revenue? Any areas where the parish could decrease expenses? Occupancy? Personnel? Other? 17 of 17 Financial Analysis