REPORT OF THE AUDIT COMMITTEE

REPORT OF THE AUDIT COMMITTEE SILVER STAR FAMILIES OF AMERICA STFOR THE YEAR ENDING DECEMBER 31 2006 As with many small non profit organizations, the Silver Star Families of America was not willing to spend 6 to 10 thousand dollars on a professional audit. The board determined that these funds would be better spent on our mission and instead an internal audit was recommended using the Virginia Society of Certified Public Accounts guidelines. These guidelines were designed to assist an NPO board of directors control financial activities until they reach the stage when a professional audit is possible and desirable. The audit committee was selected from the board of directors and membership and was tasked with the following: Determine the adequacy of internal control (a system in which the operating or recording function can be broken down into elements that are performed by different people, each checking the work of the others) the accuracy of the records and the reports to the governing body (usually the board of directors) the proper authorization of activities and expenditures the determination of the physical existence of assets a review of the tax-exempt status and identification of any activities that may endanger it Ascertaining that licenses and corporate reports are properly filed in a timely manner. In developing the audit program, the adequacy of the internal accounting controls is an influencing factor. ...