Great Idea: Scheduling Regular Financial Reviews and Audits

daryl-ohdner-vAn essential part of a co-op board’s fiduciary duty is the annual external monitoring of their co-op’s finances and financial systems.

The audit is one important way the board and members are assured that the financial health, as well as any risks to the co-op, are well-studied by an impartial third party. Daryl Odhner is the board president at Abundance Food Co-op in Rochester, New York, and he said that his board has really seen the value of conducting financial audits at the co-op. Odhner said paying for an audit is a lot like buying insurance, you want enough but not too much. “We took a vote on it,” Odhner said about whether the board wanted to have a review or audit conducted.

Not only has it created “peace of mind” among board members at Abundance, but it’s been a way for them to understand first-hand that the general manager has put into place effective systems that minimize risk.

“Our general manager was also very enthusiastic about doing an audit because he wanted a third-party view also,” Odhner said. Audits also do double-duty because they can show management where the financial structure needs improvement and it can help give management ideas for implementing change and making adjustments. “Our report had some suggestions and recommendations, but in general the overall conclusion was ‘you’re doing fine, keep doing it,’” he said.

Even though an audit may tell you what you already know, “validation is an important service,” Odhner said, in part, because some board members don’t fully understand finance. “It’s precisely because of this that the audit has value.”

Audits & Reviews Field Guide

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By |August 2nd, 2011|Categories: Connections|Tags: , |

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