Issue link: http://psai.uberflip.com/i/1181388
W EEKLY EDITION NOVEMBER 6, 2019 It' s A ud it Ti me By Karleen Kos, PSAI Executive Director …continued from page 1 Q: Is the PSAI legally required to do an audit each year? A: Yes and no. Legally nonprofits are not necessarily required to do an audit in order to maintain their status with the IRS. Sometimes funders require an audit as a condition of receiving money, but the PSAI does not directly work with any funder making such a requirement. All that said, the PSAI's own Bylaws require an annual audit unless the full membership votes to discontinue it. So to be in compliance with our own self - impose d requirement we must do an audit annually. If we don't, any Member could sue the Board for failure to carry out its duties. Q: Who chooses the auditor? A: The Board hires the auditor on the advice of the Finance and Audit Committee (FAC). The FAC include s both Board Members and members - at - large. To find the auditor the FAC issued a request for proposals (RFP) in the summer of 2014. The Committee then interviewed several firms in Minneapolis and chose the firm of Carpenter, Evert and Associates for a three - year contract. In July of 2017 the FAC and Board decided to extend the contract for three more years. Carpenter, Evert and Associates has a deep portfolio of nonprofit organizations as clients, and the group is a good fit with the PSAI's needs. In this 20 18 photo auditors Ryan Haggstrom (left) and Marc Colin (right) are at work in the PSAI office. Q: What is the point of an audit? A: The purpose of an audit is to ensure that the PSAI's accounting is being done correctly so that the Board and membership ca n feel confident in the accuracy of the financial reports they receive from management. Auditors are testing to see whether what is in our books accurately reflects what is in our bank accounts. They are also checking to see that the books reflect what is rea lly happening in the organization's financial life. For example, if we spent $xxx on salaries or rent, the auditors match the invoices, time sheets, and cancelled checks with the amount showing in QuickBooks. If the books show a different number than the i nvoices and receipts, the auditor will have the PSAI's accountant make an adjusting entry. P AGE 19 CONTINUED ON PAGE 20