What should I check before we hand the chapter books to the audit committee this year?

Before you hand anything over, check three things: what your bylaws actually call for, whether your twelve bank statements are complete and reconciled, and whether every dues dollar on the roster can be traced to a deposit. Almost every finding a volunteer review committee writes up comes from one of those three places. Everything else on the list below is supporting paper.

The good news is that most chapter bylaws do not require a CPA audit. They require an annual review by a committee of members who are not signers on the account and not the treasurer. That is a very different exercise, and it is one you can prepare for in a weekend if your records were kept as you went.

The bad news is that the preparation is where treasurers lose their evenings. Not because the work is hard, but because it is retrieval: hunting for a deposit slip from a November holiday luncheon, or trying to remember which of the four Deborahs paid the check that cleared on March 14. Assemble the packet in the order below and you will find the gaps before the committee does.

Audit, review or internal committee: what your bylaws actually require

Pull up your bylaws and search for the words audit, review, and finance committee. The language usually falls into one of three patterns, and they carry very different obligations.

Bylaw language	What it means	Typical cost
"The books shall be audited annually by a certified public accountant"	A real engagement with an outside firm. Rare in local chapters, common where national requires it above a revenue threshold.	Several thousand dollars
"The books shall be reviewed annually"	Often satisfied by a CPA review engagement, but many chapters read this as an internal review. Ask national which they accept.	Varies widely
"An audit committee of three members not including the treasurer shall examine the accounts"	An internal volunteer review. No accounting credential required.	Volunteer time

Two additional checks sit on top of the bylaws. Your state may require an audited financial statement above a gross revenue threshold if you solicit charitable contributions there, and those thresholds differ state by state, so verify with your own state's charity registration office rather than assuming. And if you are a chartered chapter, national may impose its own requirement in the affiliation agreement. Read that agreement before you scope the work.

Keep reading: Is it worth moving our dues collection off personal payment apps this fall or not?

Bank statements and reconciliations for all twelve months

The committee will start here, so you should too. Print or download every monthly statement for the fiscal year, plus the statement for the month after year end, because that one shows which checks written in the old year actually cleared.

For each month, the committee wants to see a reconciliation that ties three numbers together: the bank's closing balance, the outstanding items, and the balance in your books. If you have never written one, the arithmetic is short.

• Bank statement ending balance
• Plus deposits in transit, money you recorded that had not yet posted
• Minus outstanding checks, checks you wrote that had not yet cleared
• Equals your book balance

If it does not equal, the difference is a clue, not a catastrophe. A difference equal to exactly one transaction amount usually means something was entered twice or not at all. A difference divisible by nine often means two digits were transposed somewhere. Chase it while you still remember the month.

Include statements for every account, not just the operating checking. Savings, a certificate of deposit holding scholarship funds, and any payment processor balance all count. A processor account that holds money for four days is still chapter money on the day the fiscal year ends.

Dues roster tied back to deposits

This is the section where internal reviews most often produce a finding, and it is the section a clean roster makes trivial.

The committee wants to sample. They will pick perhaps ten to fifteen members off your roster, look at the dues amount recorded as paid, and ask to see the deposit that money arrived in. Then they will run it the other way: pick three or four deposits and ask which members made them up.

Build the tie-out sheet in advance

Make one sheet with a row per deposit and columns for date, total amount, and the member names inside it. Suppose your chapter charges $85 for general members and $45 for early career, and you banked a deposit of $520 on October 9. That should decompose as five general at $425 plus, say, two early career at $90, which leaves $5 unexplained. That $5 is probably a partial payment or a rounding error in a transfer, and you want to have the answer written down before someone asks.

Total the dues column across the whole roster and compare it to your dues revenue line for the year. If the roster says you collected $9,180 and the income statement says $9,455, the $275 gap is real and findable. It is usually a late renewal recorded in revenue but never marked on the roster, or a member who paid twice and was refunded.

Cash receipts from events and how to document them

Cash at the door is the hardest thing a volunteer chapter handles, because there is no bank record of what came in, only of what got deposited. The control has to happen in the room.

The workable practice is two people, one form, one envelope. Two officers count the cash at the end of the event, both sign a count sheet showing the total by denomination, the sheet goes in the envelope with the money, and the deposit slip gets stapled to the count sheet afterward. Now the committee can compare three numbers: attendees checked in, cash counted, cash deposited.

If your event had a $30 door price and thirty-one people signed the attendance sheet, expect $930 in cash and card receipts combined. If you deposited $840, you need the explanation, and "we comped the speaker and two board members" is a perfectly good one as long as it is written down before the committee asks.

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Check register, approvals and dual signature evidence

Give the committee a register listing every disbursement for the year: date, check or transaction number, payee, amount, and expense category. Then be ready to support the larger ones.

Most chapter policies require a second approval above a set dollar amount, often $500 or $1,000. The evidence can be a board minute authorizing the expense, an email approval from the president, or two signatures on the check itself. Whichever it is, attach it to the item in the packet rather than promising to find it later.

Note any voided checks and make sure the physical voided check or a register notation exists. A gap in check numbers with nothing explaining it is the sort of thing a committee has to write up even when the explanation is innocent.

Reimbursements and the receipts behind them

Officers front money constantly: name badges, a deposit on a meeting room, sheet cake for the installation dinner. Every one of those needs an itemized receipt, not a credit card slip showing only a total.

Three habits keep this section clean. Require the reimbursement request in writing, even a short email, so there is a record of what was bought and why. Do not reimburse the person who approves the reimbursement, which means the president signs off on the treasurer's expenses and vice versa. And set a deadline, commonly sixty days, after which a request is not paid, so December receipts do not arrive in June after the books are closed.

Alcohol, gift cards and anything that looks like a gift to an individual deserve extra documentation. Gift cards in particular are treated as cash equivalents, and a committee will want to know who received each one.

See how ChapterDues handles this for women's membership chapters and alumnae groups

Prior year filings, EIN letter and state registration

The financial detail is only half the packet. Include the organizational paper too, because that is where dormant problems live.

• The IRS determination letter or, if you operate under a group exemption from national, the group exemption documentation naming your chapter.
• The EIN assignment letter. Confirm the chapter has its own EIN and that no account is opened under an officer's Social Security number.
• Last year's Form 990-N, 990-EZ or 990 as filed, with the confirmation. Filing thresholds and forms are set by the IRS and change over time, so check the current instructions rather than repeating what a predecessor did.
• State charitable solicitation registration and annual report, if your state requires them.
• Current bank signature card showing who has access, and a note of anyone removed during the year.

The signature card deserves a second look. A treasurer who left three years ago and still appears as a signer is a finding, and it is one you can fix in an afternoon at the branch.

Writing the committee report for the annual meeting

Keep it short and structured, because it goes into the minutes and future officers will read it.

Open with the scope: what period was examined, what documents were reviewed, and what was sampled rather than examined in full. State plainly that this was an internal review by members, not an audit performed under professional standards, if that is what it was. Then list findings, each with a recommendation and an owner.

A finding is not an accusation. "Deposit detail for three events could not be traced to individual attendees" is a process observation, and the recommendation writes itself: use a two person count sheet at every event beginning with the fall kickoff. Close with the committee members' names and the date, and get the board to accept the report by motion so the acceptance is recorded.

Making next year's review a shorter weekend

Every item above is easier when the record is built during the year instead of reconstructed at the end of it. A roster where each member's dues payment carries its date, amount and deposit reference is a tie-out sheet that already exists. A renewal history that shows who paid, who lapsed and who was comped answers the sampling questions without a search.

That is the work ChapterDues is built for: dues collection tied to the roster, renewal reminders that keep the record current, and a treasurer handover report that hands your successor, and your review committee, a book that balances. Set it up before renewal season opens and next year's packet mostly assembles itself.