Every end of June, our Finance team at CHS gears up for one of its most critical times of the year—the annual audit. While the word “audit” may be intimidating for most people, it’s actually an important process that proves we’re using our funds responsibly, staying compliant with regulations and protecting the future of our programs.

So, what exactly is an audit and why is it important?

By definition, an audit is an official inspection of an organization’s accounts. But at CHS, it’s much more than balancing the books and checking the numbers.

“All the money that comes in and all the payments that go out—the auditors review it to make sure everything is coded correctly, approved, and that we’ve followed any restrictions,” explained CFO Shannon Clark. “Even something as small as a missing gas receipt could be selected for audit. We have to be able to prove that we did everything right, because if we can’t prove it, then it’s considered wrong.”

This year’s audit was conducted by the Sioux Falls accounting firm Eide Bailly. They joined our Finance team on campus for three weeks, combing over every part of our financial operations. In addition to reviewing our budgets and reports, Eide Bailly also conducted interviews with our staff and board members to check for risks related to fraud and compliance.

“A major thing they focus on is fraud,” said Shannon. “They look for areas where we could be vulnerable. So, we need to ensure that we are limiting and identifying any areas for risk and then creating policies and procedures around that to minimize fraud.”

Controller Rachel Lord said that if we don’t document things correctly, it could be detrimental to CHS.

“The big thing that people forget is that if we don’t document things correctly, we risk losing federal funding,” said Rachel. “Not only that, but we could lose donors. If we have a bad audit, donors may decide we’re not using funds as intended and could choose not to donate to us again.”

With more than10 different programs and 36 separate budgets, the stakes are high. Despite the pressure, the team worked together to show how every dollar is spent. “If we get VOCA [Victims of Crime Acts] money, we have to show exactly how much came in, how we spent it, and make sure that it all balances to zero,” said Shannon.

Not only did the team work together, but the audit proved how much they had grown. Last year, Shannon shouldered most of the audit herself, so she was very grateful to have a team backing her up. “We had a learning curve, but my team really stepped up. They got everything together and knocked it out of the park.”

That team spirit made a difference during what Rachel called “a stressful but rewarding” time.

“This was our first audit as a new team,” Rachel said. “We were still closing out months, trying to hire someone, and managing so much. The auditors didn’t always understand that we couldn’t get certain things within the time frames they were asking. But we were all committed to getting it done and making it happen.”

While the audit is a serious responsibility, the Finance department wants everyone to know that they’re not here to police staff or work against them, but instead, are here to support and help.

“We know that sometimes there’s no physical receipt,” said Shannon. “A screenshot, a quick note—anything that helps document the expense is helpful.”

The goal is to never limit staff from doing meaningful work with clients, but to make sure there’s a record. “We want you to enjoy experiences with the kids and our clients,” said Rachel. “But just in case an auditor walked in and said, ‘show me,’ we need to be ready. And if we can’t do that, then it’s a huge problem.”

At the end of the day, the audit is all about protecting CHS’s mission to prevent, treat and heal trauma. “We know that CHS offers great services to kids, families and the clients,” said Shannon. “But if we don’t have the process on the backend, it won’t matter. Protecting our funding and our financial integrity is how we keep serving them.”

This year’s audit will wrap up on November 1. In the meantime, keep turning in your receipts, reaching out to the Finance department if you have questions and continuing the amazing work you all do for CHS. Finance has your back—and thanks to their diligence, we’re able to keep making a difference.