"Promptly Review" Unit Financial Statements

[bballrob]

What is the timeline that is considered a "Prompt review" of a monthly financial statement? At what point is this flagged as an audit exception?

[garystroble]

What is the timeline that is considered a "Prompt review" of a monthly financial statement? At what point is this flagged as an audit exception?

I was told by an auditor within 30 days, but that does not seem real prompt to me. Prompt to me means maybe 7 to 15 days, but that is just my opinion. It is interesting and confusing that no standard is reduced to writing anywhere on this question.

[waltbristow]

The church audit department had told me, an assistant area auditor, that the review and signature are timely if done within 45 days. Thus, the January 2024 statement should be reviewed and signed by about February 15. Give a little slack if the statement comes later than usual, etc. LUFAS will usually tell you if the timely requirement is meet.

[eblood66]

The church audit department had told me, an assistant area auditor, that the review and signature are timely if done within 45 days. Thus, the January 2024 statement should be reviewed and signed by about February 15. Give a little slack if the statement comes later than usual, etc. LUFAS will usually tell you if the timely requirement is meet.

Yes, if you do electronic reviews LUFAS will automatically mark the review as either 'prompt' or 'not prompt' depending on if the review was within 45 days. The auditor doesn't have any option to change that response regardless of whether there were extenuating circumstances or not.

[bballrob]

I appreciate the responses. I was mainly trying to figure out at what point the system flags them. During the mid-year cycle in 2023 I wrote an exception for a unit that didn’t review the June statement until August 16(47 days after the end of the month). When the assistant area auditor reviewed the audit, he said he wasn’t concerned about it since the system hadn’t flagged it.

In this current period. I have a unit that was flagged by the system for not reviewing the September statement until December 1, a full 2 months after the end of the month.

Personally I’m in the 7-15 day camp, and 30 days seems more than enough for sure! Anything beyond that, in my opinion, is not “prompt”.

[eblood66]

I appreciate the responses. I was mainly trying to figure out at what point the system flags them. During the mid-year cycle in 2023 I wrote an exception for a unit that didn’t review the June statement until August 16(47 days after the end of the month). When the assistant area auditor reviewed the audit, he said he wasn’t concerned about it since the system hadn’t flagged it.

I'm surprised you were able to answer that audit question yourself. In my experience, if the review is done online the system will answer the question and does not allow the auditor to change it. As for the 47 days, perhaps in this case the June statements were not generated at the first of the month and the system takes into account when they were actually available.

[BrianEdwards]

I don't know about the system behavior, but the online FAQ The Financial Statement for Wards and Stakes states that "The Unit Financial Statement should be reviewed monthly by each bishop and stake president and by a clerk. It is available in LCR a few days after the end of each month." To me, this indicates I can review the statement at any point during the month, and that any kind of 7-15 day flagging would be incorrect. If the flagging was simply to remind me that I still needed to do it, no problem. But if that resulted in an exception, I'd think there's a disconnect between the Help Center and the Audit process (gratefully, that doesn't seem to be the case).

But if the audit process is asking for a "prompt review", and the Help Center states the review should be done monthly, then that also seems to be a disconnect -- since most everyone would agree a prompt review isn't on day 29 of a month

[waltbristow]

The audit question (for wards and branches) asks "Did the bishop and clerk promptly review, sign, and date each month’s Unit Financial Statement?" If the review is done through LCR, LUFAS will show the date of the primary and secondary review. If the date is not "prompt" the chart in LUFAS will have a red triangle around an exclamation mark (warning triangle). If the date is blank, LUFAS shows the warning triangle. Any warning triangle, absent an explanation, means the auditor can safely answer the question "No." When might the answer be "Yes" even if LUFAS shows otherwise? It is possible that the statements were printed and the printed statements were reviewed, signed and dated in a prompt manner.

My conversations with the Church Auditing Department suggest that a Unit Financial Statement should be reviewed and signed by the middle of the following month -- about 45 days. For example, the December statement, which is available to units the first couple days of January, should be reviewed and signed by the middle of February. In the current audit, In the current ongoing audit I have one ward where the bishop reviewed and approved the December statement on 14 February. LUFAS shows that as timely. The July statement was reviewed on 18 September and LUFAS shows it as timely reviewed. That is reasonable because the July statement may not be available until August 3.

However, I don't try to determine whether a review meets the 44+ day standard. I rely on LUFAS to determine whether approvals were made promptly. As long as there are no warning triangles, I assume all reviews were prompt; the auditor should answer Q. 19 "Yes." If there is even one warning triangle, I believe Q. 19 should be answered "No." If there is a warning triangle and the auditor answers the question "Yes", I mark it as having been answered incorrectly and add a comment. If the auditor has information otherwise, I ask the auditor to add a comment outlining the circumstances.

[jayrollins]

If the official LUFAS criteria was for leaders to review Local Unit Financial Statements within 45 days, that criteria would be specifically included in the question being answered by auditors. It is not. Question 19 simply asks: "Did the bishop and clerk promptly review, sign, and date each month’s Unit Financial Statement?" There is no mention in Question 19, or its instructions to the auditor, of how many days without a review might be enough to cause an auditor to answer "no" and write up an audit exception. Until a 15, 30, 45, or whatever-day standard is written into LUFAS, confusion over what constitutes an exception for this question will continue to occur.

[waltbristow]

If the official LUFAS criteria was for leaders to review Local Unit Financial Statements within 45 days, that criteria would be specifically included in the question being answered by auditors. It is not. Question 19 simply asks: "Did the bishop and clerk promptly review, sign, and date each month’s Unit Financial Statement?" There is no mention in Question 19, or its instructions to the auditor, of how many days without a review might be enough to cause an auditor to answer "no" and write up an audit exception. Until a 15, 30, 45, or whatever-day standard is written into LUFAS, confusion over what constitutes an exception for this question will continue to occur.

There is always confusion when we are not given a letter of the law guideline. I've always been amazed that anyone who is supposed to review a financial statement would not want to do it before the next statement comes out. Why would you even consider waiting to review the January statement until after the February statement is available? Don't you want to review the January statement BEFORE the February statement comes out? How about we just get into the mind set that we'll review the January statement within a week (or two) of when we get it? Do we really want to procrastinate?