Annual Audits
The primary purpose of an audit is to assure that financial statements are fairly stated. Any persons overseeing the church’s monies or investments needs an audit to protect both the church’s assets and themselves against suspicion of mishandling those assets.
The audit is a requirement of the canons of the Episcopal Church and of the diocese, and is a good and reasonable business practice. Every congregation is required to conduct an annual audit which must be completed and submitted to the diocese by September 1 of each year.
To provide additional tools to every parish (large and small), the diocese has prepared the below workbooks to provide additional guidance and templates to assist in preparing your audit. These workbooks can be used by a committee or by an outside auditor to meet the requirements of an Agreed-Upon Procedures Review.
The following documents can be downloaded directly and then uploaded to the diocese upon completion with supporting documentation using the form on this page.
Frequently Asked Questions
What needs to be submitted to the diocese and when?
All parishes, mission congregations, and institutions of the diocese are required to conduct an annual financial audit and submit it to the diocese by September 1 each year. Audit submissions must include a certificate or report of the audit as well as the audited financials, including but not limited to the year-end balance sheet and profit & loss statements. (Diocesan C&C, Canon VI, section 6.02).
Is an independent CPA or accounting firm required for the church’s annual audit?
All audits require the formation of an Audit Committee.
Good practice is to have an independent external auditor, either an accounting firm or individual CPA, perform an audit if your congregation is in transition and/or meets the below criteria:
Annual Church Revenue |
Audit Requirement |
| Greater than $2 million | External independent audit annually |
| Between $1 and $2 million | External independent audit every third year with Agreed Upon Procedures and Committee Review/Audit in the intervening years |
| Between $500,000 and $1 million | External independent audit every fourth year with Agreed Upon Procedures and Committee Review/Audit in the intervening years |
| Under $500,000 | Agreed Upon Procedures and Committee Review/Audit annually |
Who should serve on an audit committee?
An Audit Committee should include at least one Vestry or Bishop’s Committee member. The Audit Committee should not include the Treasurer nor the Finance Committee Chair, and not more than one member of the Finance Committee.
If you have other questions not answered here, feel free to reach out to the Finance or Convention office for assistance:
Director of Finance & CFO
The Rev. Susan Stanton
213.482.2040, ext. 233 | sstanton@ladiocese.org
Controller
Ms. Martha Macias
213.482.2040, ext. 268 | mmacias@ladiocese.org
Assistant to the CFO
Ms. Julie Kelly
213.482.2040, ext. 227 | jkelly@ladiocese.org
Convention Coordinator
Ms. Samantha Wylie
213.482.2040, ext. 253 | swylie@ladiocese.org
Manual of Business Methods in Church Affairs
This Manual identifies requirements and seeks to provide helpful advice on sound, practical internal controls, accounting guidelines and business practices.
Manual de Metodos de Negocios en los Asuntos de la Iglesia
Este Manual identifica los requisitos y trata de proporcionar consejos útiles sobre controles internos, directrices contables y prácticas empresariales sólidas y prácticas.
Financial Management for Episcopal Parishes
By James Jordan (Amazon link)
The book defines the roles of the clergy, staff, vestry, and congregation and outlines what needs to be done by them to design and implement a system of checks and balances for financial oversight and stewardship, in order to protect donations and assets.