Diocesan Audit Guidelines

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Each parish within the Diocese of Washington is responsible for submitting audited financial statements to the Bishop of Washington. These statements must be received by September 1st of the year following the calendar year being reported. To ensure financial statements are fairly stated, canon law requires an annual audit be completed by each parish. For direction in completing the annual audit, the Diocesan Council adopted the audit guidelines established by the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the USA (DFMS).

These guidelines are included as Chapter VI in the Manual of Business Methods in Church Affairs which is published by the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the USA. In addition to the audit guidelines, the manual includes a great wealth of useful information aimed at assisting congregations in effectively running the business of the church, including information relating to tax, financial management, insurance, and other issues. This manual can be purchased directly from the DFMS through Episcopal Parish Services at 800/903-5544 or online at www.episcopalparishservices.org

The audit guidelines allow the following three types of financial audit be conducted by a parish:
1) Audit by independent CPA (Certified Public Accountant)
2) Audit by independent PA (Public Accountant)
3) Audit by Committee chosen by parish

These guidelines were created for parishes that choose to do an audit by committee instead of engaging a CPA or PA to perform the audit. The guidelines outline the steps and processes necessary to adequately review the financial statements and internal accounting controls of a parish.

Two changes, which were recommended by the Diocesan Finance Committee, are incorporated into the audit guidelines approved by Council. Both of these changes affect bullet 5 on page VI-3 of the manual, discussing the committee audit. First, the final sentence in the second paragraph of bullet 5, dealing with reimbursement for out-of-pocket expenses, was deleted. Second, the following sentence was added as the second sentence to the third paragraph under bullet 5: “A committee member may be someone, other than a CPA, who is engaged by the congregation to perform the committee audit, as long as the Committee Audit Guidelines and format are followed.”

If you have any further questions regarding the audit guidelines, please contact Eva Myking, director of administration, at 202/537-6537.