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 Q: Will an audit find theft or malfeasance? A: Possibly, but not definitely. An audit is not intended for that purpose – though the tests auditors do often raise red flags if something is wrong. For example, the audito rs will look at our office lease and see how much we are contractually bound to be spending a year on rent. If the books and receipts show a number that is very different than what is in the lease, and this discrepancy can't be explained by the staff to th eir satisfaction, the auditor would be obligated to notify the Board. In addition: • The PSAI has put a series of internal controls into place. These cover things like who can make purchases, who signs checks, how the Association's credit card can be used, and so on. The auditor reviews these controls and checks to see whether we are following them. If not, this would be reported to the Board. • Each year the Board directs the auditor to do a "deep dive" into an area of the PSAI's accounting. The topic of this "deep dive" is always a surprise to management, making it harder to "cover tracks" on short notice if something is happening that shouldn't be. Doing a surprise "deep dive" is a be st practice the Board implemented four years ago. Apart from the auditor's function, PSAI's treasurer has access to review both the PSAI's bank account and credit card account online. S/he does this at least once a month and reports what s/he finds to the Board. This allows the Board to review the financial reports they are getti ng from management and compare them with the Treasurer's report. If they match, the Board can feel comfortable they are getting good numbers. As anyone who has ever employed others knows, if a person is really determined to "get away with something" they will find a way. The various controls the PSAI has put in place are designed to ensure anyone who tries to steal or misuse the PSAI's funds won't get away with anything for very long or in a very large amount. P AGE 20 CONTINUED ON PAGE 2 1