Resolving Audit Exceptions

Background

Stake and ward leaders have a duty to use Church resources as directed by the Lord. The Church has established financial policies, procedures, and practices to:

• Guide and protect priesthood leaders and clerks in fulfilling their financial duties.
• Protect the sacred funds of the Church.

Church financial audits evaluate a stake’s or ward’s compliance with approved policies, procedures, and practices. An audit may provide evidence that priesthood leaders or clerks are not following some policies, procedures, or practices.

Audit Exceptions

An audit exception is evidence, provided by an audit, that someone has not followed a Church financial policy, procedure, or practice. An answer of “No” to an audit question indicates an audit exception.

Audit exceptions identify training opportunities that, when properly addressed by the stake audit committee, will:

• Strengthen and protect priesthood leaders and clerks.
• Better secure Church resources.

Resolving Audit Exceptions

Audit exceptions should be resolved within 30 days of the audit’s due date.

An audit exception has been resolved when the stake audit committee is confident that:

• The identified problem has been corrected, if possible.
• The unit’s priesthood leader and clerks clearly understand why the exception occurred and have been trained as needed on correct Church financial policies and processes.
• Steps have been taken to ensure that the problem will not happen again.

Ultimately, an audit exception is resolved when it no longer occurs. When reviewing future audits, the stake audit committee should be aware of each unit’s history of audit exceptions. The committee should take appropriate measures if an audit exception is repeated.

Recording the Resolution of Audit Exceptions

The stake audit committee chairman or committee member records or reports the resolution of audit exceptions by checking the Corrective Action Completion box for each exception in the Audit Follow-up section of the Local Unit Financial Auditing System (LUFAS).