The Local Church Audit Guide, For United Methodist Congregations, Internal Audit Department and Committee

Local Church Audit Guide Page 22 Speaking of salaries and payroll, how do we verify that amounts paid are accurate? Hey! Glad to know you’re still alert. But then, we knew you’d be. Here are the steps: Check staff-parish relations committee and charge conference records versus payroll records to verify that correct salaries or rates have been paid. If there are tax deferred annuities (TDAs), Section 125 or other salary reduction agreements, verify existence of signed agreements and proper tax withholding applied. Verify pension contributions with the pension board. If there is a salary reduction agreement, review documents for accuracy and verify that agreements have been approved in Charge Conference or Administrative Board minutes. Verify that housing allowance resolutions are in place and have been properly applied to reduce clergy's reportable 941 and W-2 income. Local Church Audit Guide Page 23 Are we ready yet to look at the control system? Yes. As part of the audit, it is essential that the internal control structure for receipts and disbursements procedures be reviewed regardless of the size of the church. The internal control structure is the process that assures the local church's operational efficiency and effectiveness, that its financial reporting is reliable, that it is complying with the Discipline and with laws, and that its assets are safeguarded. The internal control process should be in place ...