Social Audits
Fiscal Responsibility Audit

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Assertion:

The organization conducts its operations in a fiscally responsible manner, acknowledging its responsibilities to all stakeholders.

Fiscal Policy:

• The organization has implemented fiscal policies, financial management systems, and accounting controls that help to ensure fiscal responsibility and long-term viability.

  • Obtain and review the financial policies and procedures manual. Document understanding of accounting controls in place.

  • Review the most recently audited financial statements and related management letter.

  • Obtain investment policy and determine if provisions are made for socially responsible investing. Is the composition of the portfolio communicated to all concerned stakeholders?

  • Obtain management’s representation and attorney letter concerning whether any lawsuits have been adjudicated or are pending related to financial management and anti-trust law.

Financial Reporting:

The organization makes a commitment to accurate, clear and timely financial reporting. Responsible companies report its financial position in plain language to employees at least annually (and to other stakeholders if required by law).

• Interview management to determine if any form of open book management is practiced. Discuss with BOD member the BOD’s involvement in financial reporting.

• Determine whether the organization reports on pension or other benefit programs to employees in plain language periodically.

• For not-for-profit organizations, determine if the amount of program versus administrative expense is reported to donors and grantors.

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