IROP's and Audits

Had an interesting experience during our audit last week. The auditor asked to see one of the IROP reports to check it against the Unit Finance Report. Everything checked out so no problems (exceptions) noted. However, it brought up a couple of questions that the auditor and I talked about.

First - do auditors in other stakes (US and worldwide) ever check the IROP's against the units' finance reports? This is the first time I have had an auditor do it (last 8 years as either ward clerk or stake clerk) but it makes sense since it is an expense debited to the unit (in our case the stake). I actually like that the IROP's come via MLS as it was sometimes a pain trying to track down the report for an expense that was charged to the unit and you didn't know which auxiliary to charge it to.

Second - and probably more of an issue; normally when an expense is brought to the unit (stake, district, ward, or branch - no matter) there is a reimbursement slip with receipts or invoice or something which the Bishop/Stake President looks as (as well as the clerk) prior to paying the expense. However that is often not the case with IROP's where auxiliary presidents, or whomever will order for the unit and the Bishop or Stake President may not even know about it until it shows up on their doorstep (prior to reports coming via MLS) but even then it is often "after the fact". How do some of you handle this as it really does fly in the face of the training we have all been given on how to handle funds and expenses.

Just wondering
Jim

FFRsqpilot wrote:First - do auditors in other stakes (US and worldwide) ever check the IROP's against the units' finance reports? This is the first time I have had an auditor do it (last 8 years as either ward clerk or stake clerk) but it makes sense since it is an expense debited to the unit (in our case the stake).

In all my years of being a financial clerk, I've only had one auditor ever check out a direct debit and request documentation, and that was probably 3 years ago. It's certainly a fair question, since the audit instructions simply say that auditors are to inspect "expenses". It never says just "checks", so direct debits should be checked. In my opinion, auditors who don't inspect non-check expenses are overlooking an important area, but it's their choice what they inspect, not mine.

FFRsqpilot wrote:Second - and probably more of an issue; normally when an expense is brought to the unit (stake, district, ward, or branch - no matter) there is a reimbursement slip with receipts or invoice or something which the Bishop/Stake President looks as (as well as the clerk) prior to paying the expense. However that is often not the case with IROP's where auxiliary presidents, or whomever will order for the unit and the Bishop or Stake President may not even know about it until it shows up on their doorstep (prior to reports coming via MLS) but even then it is often "after the fact". How do some of you handle this as it really does fly in the face of the training we have all been given on how to handle funds and expenses.

We do attach an expense authorization form to each IROP that is initiated by a member of the stake, and get the stake president's approval (I'm a stake financial clerk; obviously it would be the bishop's approval for a ward). But it is indeed "after the fact." I don't see that as being a significant problem, however. (We have chosen not to bother with all the IROPs for phone expenses -- since they are initiated by the Church and reimbursed by the Church, we don't make the stake president approve all those expenses, since he didn't authorize them personally in the first place.)

Consider the example of a Stake YW President who needs to purchase an item available at the Distribution Center. She examines her available budget and notes that this expense falls within both the amount and purpose that was approved by the stake president in the annual budget she submitted before the year began. She could:

• Place the order and pay for it herself, and then submit a reimbursement request. That request will certainly be granted, and the stake president will authorize her to be reimbursed; or
• Place the order and charge it to the stake. Then she fills out an Expense Authorization form and submits it.

I don't see any significant difference between those two scenarios. In both cases the stake president's approval is both before the fact (in the annual budget) and after the fact (on the expense authorization form). So I don't think that following the second pattern "flies in the face of the training we have all been given."

The problem I have had with Auxillaries ordering materials is duplication.
For example, when new materials came out for the Young Women - My Bishop ordered
the new books, and the Young Women ordered new books. We ended up with twice
as many books as we needed, and unnecessarily spent funds that could be put to better use.

The fact that at any Distribution Center, anyone can just say "Charge it to my ward" seems
to circumvent the whole approval process in the first place.

The solution my ward uses is that all orders go through the clerk. I'm teaching my assistant to do it now, so that he can make orders in my absence. But the auxiliaries all seem happy to let me handle all the ordering. Then again, I'm not sure any of the members know if they can charge directly to the ward. Just out of curiosity, which leadership positions can charge distribution orders to the unit?

nutterb wrote:Just out of curiosity, which leadership positions can charge distribution orders to the unit?

In my experience, at the DC anyone can place the order - they don't ask. I have been asked to provide the bishop's address, but not every time. Online, the permissions are more limited, though I can't find a list right now of who has administrative access.

aebrown wrote: We do attach an expense authorization form to each IROP that is initiated by a member of the stake, and get the stake president's approval (I'm a stake financial clerk; obviously it would be the bishop's approval for a ward). But it is indeed "after the fact."

Thanks this is a great idea. - I like the idea of attaching an expense authorization form to the IROP. That way we can show an auditor that the Bishop/Stake President has approved the expense. We have not been doing that and to be honest I never thought much about it until this last week when the auditor wanted to look at one of the IROPs and asked how does the Stake President authorize it. By at least attaching an expense authorization form to the IROP there is some form of paper trail and approval.

Jim

The ward I belong to has an assistant ward clerk assigned to order materials. The auxiliaries are told that only he places orders unless they want to pay and get reimbursement.

Just a couple of weeks ago, my auditor looked through the payment request forms relating to a Distribution Center order, but that was only because we had no other expenses for that month (February) that he could review. Surprisingly, we didn't cut any checks at all, but we did have 2 charges come out. I was very glad I'd gone ahead and had the Bishop sign off on the payment request forms for those category changes. Other than that, no, I've never had an auditor ask about them, although there's no reason why they couldn't.