Keeping your Charity on the Right Track: Internal Audit
For month 8 of our Keeping Your Charity on the Right Track series we will be looking at internal audit and controls.
Month 8 – Internal Audit/Internal Controls Review
Trustees have duties to safeguard charity assets and to ensure the best application of resources, and a good system of internal control is key to this. Sound internal controls reduce, but cannot eliminate entirely, the risk of loss through theft, fraud, bad decisions, error etc. The internal control review should not just cover finance but also operations and governance. It can be done in-house by a member of the finance team, or a peer from another department. Another option is to use an external consultant such as an auditor or others with relevant experience.
Checklist for Month 8:
- Ensure you are familiar with the Charity Commission guidance on internal controls.
- Review the documentation of your internal controls and ensure it is up-to-date.
- Review your risk register and ensure the internal controls in place are appropriate to manage the risks identified.
- Ensure that consideration of the monitoring and review of internal controls is included as a board meeting agenda point at least annually. This process will drive the review you undertake.
- Document the process, including within board minutes.
Or read the previous seven topics below:
- Month 1: Is your Board effective?
- Month 2: Reporting to the Board
- Month 3: SORP compliance
- Month 4: Charity Reserves
- Month 5: Is Tax on Your Radar
- Month 6: Are you Making Effective Use of Resources?
- Month 7: Reporting
This governance guide has been put together along with our Charity and Not for Profit colleagues across our association MHA. If you have any questions or require any advice about internal controls, please contact us on 01903 234094.