A newly hired CEO wanted to begin with a clean slate, and wanted assurance that the organization had cost-effective internal controls, and that they were documented, communicated, and monitored. The organization had always received “clean” financial statement audits in the past, but the CEO was well aware that a clean audit does not necessarily mean that the internal controls were effective.
The organization decided to engage Tate & Tryon to perform an audit of its internal controls. Our approach took into consideration a changing internal control environment in which technology-based controls replace certain manual controls. More importantly, Tate & Tryon’s risk-based approach recognized that nonprofit organizations have controls at the senior management and board/committee level that may compensate for certain limitations in processes due to staffing limitations.
Tate & Tryon’s unique understanding of nonprofits and their control environment facilitated a practical audit approach designed specifically to provide assurances on the organization’s internal controls while identifying risks and cost-efficiencies. A number of our recommendations resulted in improved internal controls that the organization was able to implement immediately at minimal cost. The organization now has a roadmap for continuous review and enhancement of the organization’s internal controls. The board—through the financial oversight committee—now has a clear understanding that one of its major responsibilities is the oversight of internal controls. Lastly, the audit process reinforced the organizational culture of accountability and transparency to the board and stakeholders.