change in bylaws..audit requirement

the sept 24 minutes of the excom meeting state"
Changes to SSA Bylaws and Foundation Bylaws


The need to make changes to requirements for financial audits and financial reviews were discussed, and it was noted that the Foundation Bylaws specifically provided for review as an alternative to full audit, while the SSA Bylaws did not. It was agreed that the SSA Bylaws should be amended appropriately, and Carswell was instructed to prepare a draft amendment to be considered at the next Excomm meeting and, if approved, presented to the Board for adoption at its September 30 meeting"

The Oct 2 report to members of the full board meeting were totally silent on this matter.

THIS IS AN IMPORTANT TOPIC.

For those of you who might not understand what an audit is following is a summary of the important points. For those of you who understand, please bear with me.

1. An audit by a CPA , as required by the current bylaws, is a formal review of the financial records and statements of an organization. The CPA REVIEWS and does not necessarily prepare, the financial statements. He is professionally obligated to do whatever standard and appropriate audit test he feels are required for him to issue a FORMAL OPINION to the board of directors of the organization as to the adequacy and accuracy of the financial statements and records.
2. Along the way, an auditor is required to follow any threads in any records that he inspects that might lead to inaccuracy or fraud. .
3. The auditor is supposed to verify that currnt standard accounting practices are being followed in accounting for revenue and expenses.
4. An auditor also usually takes a peek at internal controls and comments on them.

At the conclusion of an annual audit , the cpa signs an OPINION STATEMENT which is normally addressed to the Board of directors ( chairman). A clean audit will be two paragraphs and essentially say that standard auditing procedures were followed and the financials fairly and accurately represent the condition of the entity being audited.

When there are problems, such as missing funds, or NO reports being filed with government, or worse yet no checks being made out to govt. STANDARD AUDIT PROCEDURES WILL CATCH THIS. These problems result in a QUALIFIED OPINION in which the auditor flags the problems, But in the case of SSA, I cannot imagine an auditor giving even a qualified opinion.

Another thing an auditor does is to give an opinion as to the ability of an organization to meet its cash flow needs for the near future. In a for profit company this is an important part of the annual report. Sometimes the company and the auditor differ, but the auditor makes sure that his opinion is printed in the annual report.

I do not know current rules, but it used to be that a would be CPA had to intern as an auditor under the supervision of a cpa for 2 years prior to sitting for his cpa exam. The ACCOUNTING profession takes audits very seriously. Those who wrote the bylaws for the SSA took advice from someone and took the annual audit seriously.

on Sept 7 the chair wrote "
Why has an audit (or outside financial review) not been done since 2002?

The SSA hired its first CFAO during 2002. In retrospect, this may have led to a false sense of security on the part of the Board. Over the ensuing years, the Board decided not to spend funds on audits, instead allocating money on other tasks felt necessary to grow the Society. In retrospect, this was obviously "penny wise, and pound foolish." A full audit by an outside party is planned. "



These are HER WORDS, NOT MINE!!!

THE BOARD DECIDED... PENNY WISE AND POUND FOOLISH!!!

regardless of how hard working and selfless the excom, the chair and the rest of the board is, by their own admission, they DECIDED to pinch a penny.

NOW THEY PROPOSE TO CHANGE THE BYLAWS.

Further.. if they acted on the issue as the excom minutes indicate that they would at the sept 30 board meeting, they didn't even tell us about it.



OK.. The above are basically facts.



Now opinion:

1. I believe that this goes to the HEART of the big issue.. or several of the big issues.

The SSA cannot rebuild itself unless it lets the members know what is going on and WHY. Did the board vote on sept 30 to change the bylaws to remove the requirement to have an annual audit?? if so why? If so why did they NOT MENTION IT in the report post the meeting to the members.. Is thins not an important topic???

The SSA membership has been asked to TRUST THE JUDGMENT of the excom and the board to act in the members best interests.

This issue goes to the heart of their JUDGMENT and further to the question of the interplay between the excom and the rest of the board. We are not being given benefit of any knowledge of the discussion or the competing points of view on the board. We simply do not know who voted how.



But I question the basic JUDGMENT of the group, be it the excom who suggested the idea or the board as a whole if they approve changing the bylaws. It is beyond my understanding how a body that has ADMITTED that it was penny wise and pound foolish in DECIDING repeat DECIDING, to forgo the annual audit which would have nipped this problem in the bud years ago COULD SERIOUSLY EVEN CONSIDER CHANGING THE BYLAWS IN THIS MANNER.

Did we not learn anything FROM THIS WHOLE SORRY AFFAIR???

This goes directly to the JUDGMENT of the excom and the board. I feel that it is fatally flawed .