The very word “audit” strikes fear into most hearts, with visions of government accountants poking and prodding into every nook and cranny of your finances.  Fear no more! What we’re talking about here is an Operational Audit – no government agents required.  The operational audit checks policies and procedures, making sure all are appropriate and being followed accurately.  Yes, financial records are among the items checked, but the idea is to see how the records are kept, is the information reliable, assess the roles and qualifications of the individuals responsible for maintaining the records, and make sure adequate checks and balances are in place for all areas of financial record-keeping.  Accounts receivable and payable, check handling, cash handling and bank deposits are all reviewed for security and accuracy.  The actual, specific dollar amounts are not the concern of the operational audit, only how the dollars are processed.

            Finances, though, are just one facet of the operational audit. The primary goal is to ensure that current policies and procedures function in alignment with the current goals and plans of the association.  If you assess only procedures, without comparing them to current goals, you run the risk of improving processes that may not be needed to begin with, or which are completely out of line with reaching your association’s aims.

            There are consultants that specialize in operational audits for associations and, ideally, you will use their services.  They are trained and experienced in looking at association operations with an unbiased eye, and at comparing current practice with both current law and current goals and strategic plans. Association members often have preconceived ideas and prejudices, usually unconscious and unintentional, which can compromise the audit results.

            Don’t be afraid of an operational audit.  The results can only improve the efficiency and effectiveness of your association in the long run, even if those results require some tweaking and fine-tuning of how things are done.