The Audit, Part 1

Posted on by Elisabeth Weston

This week at EC3, we are having our finances and financial practices audited. This is a standard practice for nonprofit organizations (and many for-profit ones as well), but EC3 has not undertaken one in more than ten years. So it’s noteworthy.

As some of you may know, much of EC3’s recent history was “financially challenged” in many ways: we had to buy our lovely building in 2006 at the height of the real estate market; we had several years of really low enrollment (which means really low revenue); and previous executive directors had a limited understanding of accounting and finance. As a result, our bookkeeping records and practices were questionable and it led to a great deal of financial insecurity.

Over the last year-and-a-half, we have benefited from increased enrollment and we have implemented many financial “internal controls” designed to improve and sustain the health of the organization. Now it’s time for the first, real TEST of how we’re doing. An independent audit firm (Abraham & Gaffney P.C.) is going through our files, our books, and our processes so they can make a determination about the integrity of our financial position; they will also make recommendations for additional changes and improvements we can make in the future.

The fact that we finally have our books in enough order to conduct an audit is a VERY BIG DEAL to EC3, and it should be good news to all its stakeholders. I fully expect that EC3 will get a “passing grade,” but it’s stressful nonetheless. This audit is every bit as nerve-wracking as a licensing or accreditation inspection, and it’s just as critical to our continued operations and growth. If I’m more edgy than normal, you’ll know why…

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