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Audit Audit Audit- read all about it!

July 14, 2021
Audit Audit Audit- read all about it!

Friday, July 9, 2021
Hi everyone, it’s Bridget with another report on the audit. I have not been doing as much work with the audit as of late, but the auditor has been working with the ICC on site since May 24. Dan Beard, one of the auditors working with the ICC from Yeo & Yeo, attended a board meeting on June 27 to update the BoD on the status of the audit and to answer questions about the audit. The meeting minutes from the June meeting can be found here.

For the audit, the ICC is using an online system to upload documents and track the progress of the audit. Currently, the audit is about 40% done. The ICC is a little behind on their anticipated schedule. The Student Buyers Association (SBA) going out of business has required a significant amount of focus and work from staff members, which has left less time for the audit. Additionally, as Dan Beard mentioned in the BoD meeting in June, the ICC is behind in their financial reporting in a few areas. The bank reconciliation from 2019 is still outstanding, which will lead to adjustments in financial statements once they are reconciled. Thus, the unreconciled accounts are stalling the audit. Although it is taking longer than initially anticipated, the audit is continuing and making progress.

Feel free to contact me if you have any other issues, questions, or anything else you would like me to address! My email is audit.info@icc.coop and I will try to get back to you within 48 hours. I can also ask ICC GM Nick any questions you may have, so do not hesitate to reach out!

April 12, 2021

Hi everyone, I hope you’re all doing well and enjoying the warmer weather! In my last post, I mentioned that I have been looking at variances for the ICC, amongst other things. A budget variance measures the difference between the estimated and actual costs and assets. A favorable budget variance indicates gains (positive variances), whereas unfavorable budget variance indicates losses and shortfalls (negative variances). Essentially, a variance is a budget comparison, providing a snapshot of an organization’s finances at a point in time. The ICC variance covers both general budget areas and specific budget lines. An example of a  general budget area is charges and within this area, there are individual budget lines, such as ICC charges or utilities charges.

Karin Keim, the ICC the Director of Financial Services, presents the variances to the board. The board reps for each house have access to all the board meeting documents, including past variances. The December 2020 budget variance was presented during the BoD meeting on February 7, 2021 and the document is located in the February 2021 board pack folder (if you have issues accessing this, let me know).

For each variance, Karin shares her interpretation of the budget variance and revised projections with the BoD and ICC staff. In her interpretation, Karin highlights a number of points and concerns moving forward. She notes that there were not too many surprises, but that charges and total income were a little short of the projections made in the previous month. This could be due to more contract releases, fewer buyouts, invalid charges, etc. As the ICC expected, property taxes in December were higher than budgeted and maintenance caught up a bit on projects, making expenses greater. The payroll was still under budget, which was partially offset by payments to Brian Donovan, who is a current consultant helping in the finance department. Due to lower occupancy, the ICC collected less for utilities in the past year, which is reflected in the income shortfall numbers. However, in December, utilities were a larger cost due to the winter. For the year, utility expenses may not be much lower than normal even though the houses are not at full capacity. Utilities income is normally more than enough to cover the total cost of utilities for the ICC. The income and costs may even out in the last four months of the fiscal year—which ends on April 30, or the ICC may end up a bit short. Overall, though, the ICC is still $111,000 under budget in expenses. Moving forward, Karin recommended pursuing more grants and possibly asking Comerica about loaning the ICC additional money for the Escher renovations.

More recently, Karin has been working on financial projections for the rest of the fiscal year, which are predictions of future revenues and expenses for the ICC.

I’ll address one question I had when looking at the variance. Why is the budgeted net income for December ($83,804.81) so much higher than the actual net income ($1,245.43)? This is primarily because the budgeted income for December was around $328,900, but the ICC actually made around $242,700, which accounts for the significant difference. The few thousand dollars difference—not accounted for by the income difference—is due to the ICC spending less in actual expenses compared to the budgeted expenses.

If you look at the variance and have any further questions, let me know! Feel free to contact me if you have any other issues, questions, or anything else you would like me to address! My email is audit.info@icc.coop and I will try to get back to you within 48 hours. I can also ask ICC GM Nick any questions you may have, so do not hesitate to reach out!

March 11, 2021

Hi everyone! My name is Bridget Grabowski, I live in Black Elk, and am acting as the audit assistant for the 2019-20 ICC audit. There have been concerns voiced from a number of the co-ops about transparency regarding the audit, especially since it has been a few years since the last audit. I am going to—ideally—keep a weekly blog to update everyone on what I am doing for the audit and where the ICC is in the audit process.

The ICC is still in the beginning of the auditing process. Thus far, I have been looking at the 990 forms and variances from the past few years, as well as creating a list of all of the directors on the Board of Directors (BoD) from 2018-21.

The 990 forms are used by the federal government to examine how the ICC is doing financially. It is much more brief than an audit, but looks at the expenses, revenue, along with the activities of the ICC, information that is directly relevant to the audit. The ICC has submitted its 990 form on time each year.

The variances, which are generated on a monthly basis, show the difference between the expected versus the actual costs and assets of the ICC, both in terms of the month and the year as a whole. The variance is really just a snapshot in time, showing exactly how the ICC is doing at the time when the variance is calculated, whereas the audit is a much greater test of how the ICC is doing and how well the ICC is following the General Accepted Accounting Principles (GAAP). GAAP just ensures that there is a consistent and transparent way of reporting finances for all non-profit organizations.

In other current work for the audit I’m working on listing out all of the directors on the BoD who need to be listed for the auditors, particularly those that get scholarships or payments, as it is important to list all expenses for the ICC.

As I go through the process of working on the audit, I will put updates here. Feel free to contact me if you have any issues or questions! My email is audit.info@icc.coop and I will try to get back to you as soon as possible, usually within 48 hours. I can also ask ICC GM Nick any questions you may have, so do not hesitate to reach out!