Booster Club Audit and Annual Financial Review: Step by Step

Review or Audit?

Many clubs say “audit” for any year-end check. In accounting, an audit is a specific engagement only a licensed CPA can perform.

Some states require charities above a revenue threshold to submit a CPA review or audit with their charitable registration; this varies by state. See Booster Club Filing Requirements by State. Grantors and district agreements can impose their own requirements.

When a Review Is Required

A booster club holds a financial review:

• Every year at the end of the fiscal yearFiscal yearThe club’s 12-month accounting year, set in the bylaws. Many booster clubs use July 1 through June 30 to match the school year, and the club’s filing deadlines count from the day it ends.All terms
• When the treasurer, financial secretary, or any check signer resigns or leaves
• Any time the board considers it necessary

A mid-year review is useful as well. The club writes these triggers into the bylaws or standing rulesStanding rulesA club’s administrative rules, adopted by an ordinary vote and changed the same way: dues amounts, reimbursement deadlines, meeting times, and other details that shift from year to year.All terms and schedules the year-end review so the report is presented within about two months of the fiscal year end and before the federal return is due.

Who Serves

• Committee of two or three, appointed by the board or elected, as the bylaws provide.
• No check signers, and not the treasurer. Reviewers cannot review their own work.
• No relatives or household members of the treasurer or signers.
• At least one member comfortable with numbers. Professional experience helps but is not required.
• A CPA instead of a committee when the club’s revenue is large, the records are a mess, theft is suspected, or a state or grantor requires it.

Documents to Gather

The treasurer delivers these after the books close:

1. The prior year’s financial review report
2. Current bylaws and standing rulesStanding rulesA club’s administrative rules, adopted by an ordinary vote and changed the same way: dues amounts, reimbursement deadlines, meeting times, and other details that shift from year to year.All terms
3. Minutes of all board and general meetings for the year
4. Adopted budget and amendments
5. Ledger or accounting file and check register, including voided checks
6. All bank, savings, processor, and payment app statements for the year, plus the first statement after year end
7. Monthly reconciliations with reviewer signatures
8. Deposit records and count sheets
9. Payment requests, receipts, and invoices
10. Treasurer’s reports as presented
11. Copies of federal and state filings, Forms 1099 issued, and insurance policies

The Review Procedure

Review each account separately. Mark each item as it is checked. Reviewers do not correct errors themselves; they ask the financial officer to make corrections.

1. Beginning balance. Confirm it equals the ending balance in last year’s review report.
2. Monthly reconciliations. For every month, confirm the reconciliationReconciliationMatching the club’s books to the bank statement each month: the bank balance, plus deposits in transit, minus outstanding checks, equals the book balance. Someone other than a check signer reviews it.All terms agrees with the bank statement and carries a non-signer’s review signature.
3. Ending balance. Confirm the year-end book balance against the bank statement, with outstanding items listed. Look at the first statement after year end to confirm outstanding checks and deposits cleared.
4. Check sequence. Account for every check number, including voided checks, which should be kept and marked void.
5. Cleared checks. Examine each check image (or, for high volume, all checks over a set amount plus a sample of the rest): two authorized signatures, payee is not a signer, amount matches the register.
6. Disbursements. Trace payments to a written request, an itemized receipt or invoice, and approval in the budget or minutes.
7. Electronic payments and card charges. Confirm each was authorized and documented, and that none went to a personal account.
8. Receipts. Trace deposits to count sheets. Compare event dates with deposit dates; long gaps are a finding.
9. Ticket and concession reconciliations. Spot-check expected sales against deposits for major events.
10. Processor and payment app accounts. Confirm gross sales, fees, refunds, and transfers to the bank; confirm no transfers went anywhere else.
11. Budget compliance. Compare actual totals with the adopted budget; confirm overages were approved.
12. Restricted funds. Confirm each restricted balance and that spending matched the donor’s purpose.
13. Reimbursements to officers. Review every payment to an officer or relative for approval by someone else.
14. Compliance. Confirm the federal annual return for the prior year was filed, state filings are current, and insurance is in force.
15. Controls. Confirm signers on file at the bank match the bylaws, no former officers have access, and no debit cards are outstanding without board authorization.
16. Findings and recommendations. List every exception and a recommendation for each.

Financial Review Report Template

[Club name] Financial Review Report Fiscal year: [start] to [end] Accounts reviewed: [bank name, branch, account type, last four digits; repeat for each]

Presenting and Adopting the Report

1. The committee presents its draft to the treasurer and president first, so they can answer open questions. If the committee finds possible mismanagement, it goes to the board without that preview step.
2. The board receives the report and acts on recommendations.
3. The report is presented to the membership for adoption, and the secretary attaches it to the minutesMinutesThe official record of what a meeting decided, not a transcript of what people said. The secretary takes them, the next meeting approves them, and the club keeps them permanently.All terms.
4. The treasurer implements corrections, and the next review confirms them.

If the review finds missing money or false records, follow Preventing Embezzlement in Booster Clubs before discussing findings widely.