This week I heard from one of our District Deputies that three Lodges in his area have not audited their Lodge financial records for many years.
From time to time, we hear of Lodges losing hundreds of thousands of dollars to embezzlement.
These two things are certainly connected.
Why would any group of Masons refuse to take a couple of hours a year to ensure that their financial accounts are in order?
Why would any group of Masons encourage a Lodge Treasurer or other officer to act wrongly by making it clear that no one ever looks, so he will likely never be caught?
Is this meeting our responsibility to the men who raised or donated these funds?
Is this meeting our responsibility to assist the men in our Lodge?
How can we ensure that we properly respect the assets left to us by those Masons who came before?
In my opinion rather than audits, it is easier to simply deny the ability for just one person to handle payments. The treasurer may write checks but the master and secretary must sign them for example.
Our district had, er, some room for improvement with respect to audits.
But it became a priority, Lodges got training, audits happened and are now expected.
They are not an onerous burden. They are an opportunity to show Lodge members that everything is ship shape *and* that there is no room for shenanigans.
Audits are critical. They must be done and seen to be done.
In our jurisdiction it is the duty of the outgoing master to see that the books are closed, the secretary and Treasurer are keeping independent ledgers and that that gets audited. We also, do not allow the secretary and treasurer to be the same person. The secretary and treasurer pass receipts for their transactions.
It is said and known,” There are 3 things you can not hide for long. The Sun, the Moon and the Truth…
Hypothetically Speaking: Why would any group of Masons refuse to take a couple of hours a year to ensure that their financial accounts are in order? 1.) Not a priority, Pure Ignorance, To hide the Truth!
Why would any group of Masons encourage a Lodge Treasurer or other officer to act wrongly by making it clear that no one ever looks, so he will likely never be caught? 2.) These men are Not True Brother Masons, they are liars and thieves…
Is this meeting our responsibility to the men who raised or donated these funds? Each one of us are responsible to our God and it is vital for our integrity and fidelity to keep our Word, Vows, Obligations and Responsibilities.
Is this meeting our responsibility to assist the men in our Lodge? It is up to each one of us to police our own Brothers and do what is Good for our Order.
How can we ensure that we properly respect the assets left to us by those Masons who came before? By being absolutely Transparent, Accountable, Genuinely Honest, and by an independent monitor, the Grand Lodge. We need checks and balances to verify that we are keeping our WORD to the Legacy of our Ascended Departed Brothers.
I maybe did not understand the questions, but in that final moment of our death, we will ALL be ACCOUNTABLE for our all the things that we did in this lifetime.
It is my belief that monthly audits keep everyone involved. We have had brothers who stole here and there, then there were outside temptations to "borrow" money from organizations. I have trust in every Brother, but like sin, there is temptations.
We have a saying the finance industry..."Follow the money" As a finance professional, my view may be biased, but audits don't have to be complicated. But I would also propose that there are records and notes that a secretary and treasurer can make throughout the year to make the audit a smooth process. In other words, do the records make it easy to follow the money or does the treasurer keep an envelope with the entire years receipts? Which do you think is simpler to audit? Another example: any reimbursement to a brother should be accompanied by a simple form that is completed and filed each month. On that form we tie back the expense to the annual budget so the audit can easily see the approval chain. The minutes record all incoming money due to the lodge. Every check, paypal or cash payment received is recorded in the minutes. Yes, you can certainly write receipts between the Secretary and Treasurer to follow the chain of custody. Double custody isn't what protects the lodge. Disclosure and transparency are much more powerful. The bottom line is to examine the monthly bank statement to see the deposit matches back to what was recorded in the minutes.
In other words - an ounce of prevention each month is way better than a pound of pain at the end of the year. An audit is simplified based on the record keeping and statement disclosure throughout the year. How do you know? Just answer one simple question to determine how easy the audit will be. Could anyone in your lodge pick out any transaction in a calendar year and easily 'follow the money' from beginning to end?
The flow of money always presents a temptation to siphon a tad here and there. "I will not cheat, wrong, or defraud.." is not always a barrier to that temptation. This is not to disparage our Brethren, merely to point to the dangers of the snares awaiting the incautious. Annual audits, at the very *least* show that the Lodge cares about the ebb and flow of monies, and keeps careful track of where the money comes from and where it goes. We are very fortunate in my home Lodge to have outstanding officers in our Secretary and Treasurer. We are also fortunate to have a substantial amount of money in our treasury, and we like to keep track of it. Periodic audits are a good way to ensure that our funds are being used wisely. The Master forms an audit committee every year. That team examines the minutes, the books, and the reports from financial institutions to trace funds in and funds out. The only change I would make would be to a periodic property inventory, as well. All the chairs, tables, kitchen equipment, aprons, jewels, furniture, and real estate are worth a LOT of money. We should keep track of that, as well.
There is one use case where the best practical choice for a Lodge is to forego an audit rather than go through the motions of performing, approving and presenting an ill-prepared audit report to the Lodge members: resource limitations.
In other words, it is better report to the Lodge that there are not enough qualified resources to perform a meaningful audit in compliance with WMC rather than to do a well-intentioned-but-less-than-adequate audit.
The former sets a red flag with Lodge members and GL and should be viewed as an earnest invitation/opportunity for outside help. Whereas, approving and reporting a sub-standard audit for the sake of checking the box each year creates a false representation that no errors or misappropriation exists. When the same three trusted-but-unqualified Masons volunteer to audit the same SecretaryTreasurer's books year after year, it's just too easy for the members to get complacent about facts, findings and finances.
In this case, which decision shows integrity of the leaders and which is a violation of trust?
(a) the Lodge Finance Committee realizes their lack of ability and omits or delays an audit until such time as it can be performed properly OR
(b) discovering the last 5 years of Lodge audits are a sham?
IMO, this is one area where Grand Lodge of Washington can strengthen the integrity of Lodge finances throughout the jurisdiction by REQUIRING Lodge audits to conform with the WMC template and ensure Lodges follow-up and report on audit findings. Some Lodges may see that as relief and ask for assistance.
A simple system is the secretary keeps a cash book and at the end of the meeting annotates all money received and gives money to treasurer. Treasurer recounts the money, writes any checks needed to pay bills for the next month. These are recorded in sec cash book as well. Once both are double checked, the secretary and treasurer sign that entry. Monthly bank statements are provided to be included in the minutes. Audit at the end of year is simple. Compare bank statements with cash book.
In my opinion rather than audits, it is easier to simply deny the ability for just one person to handle payments. The treasurer may write checks but the master and secretary must sign them for example.
Our district had, er, some room for improvement with respect to audits.
But it became a priority, Lodges got training, audits happened and are now expected.
They are not an onerous burden. They are an opportunity to show Lodge members that everything is ship shape *and* that there is no room for shenanigans.
Audits are critical. They must be done and seen to be done.
In our jurisdiction it is the duty of the outgoing master to see that the books are closed, the secretary and Treasurer are keeping independent ledgers and that that gets audited. We also, do not allow the secretary and treasurer to be the same person. The secretary and treasurer pass receipts for their transactions.
With numbers in lodge still low since COVID-19, we took our books to another lodge in D 26 and had those brothers do our audit.
It is said and known,” There are 3 things you can not hide for long. The Sun, the Moon and the Truth…
Hypothetically Speaking: Why would any group of Masons refuse to take a couple of hours a year to ensure that their financial accounts are in order? 1.) Not a priority, Pure Ignorance, To hide the Truth!
Why would any group of Masons encourage a Lodge Treasurer or other officer to act wrongly by making it clear that no one ever looks, so he will likely never be caught? 2.) These men are Not True Brother Masons, they are liars and thieves…
Is this meeting our responsibility to the men who raised or donated these funds? Each one of us are responsible to our God and it is vital for our integrity and fidelity to keep our Word, Vows, Obligations and Responsibilities.
Is this meeting our responsibility to assist the men in our Lodge? It is up to each one of us to police our own Brothers and do what is Good for our Order.
How can we ensure that we properly respect the assets left to us by those Masons who came before? By being absolutely Transparent, Accountable, Genuinely Honest, and by an independent monitor, the Grand Lodge. We need checks and balances to verify that we are keeping our WORD to the Legacy of our Ascended Departed Brothers.
I maybe did not understand the questions, but in that final moment of our death, we will ALL be ACCOUNTABLE for our all the things that we did in this lifetime.
It is my belief that monthly audits keep everyone involved. We have had brothers who stole here and there, then there were outside temptations to "borrow" money from organizations. I have trust in every Brother, but like sin, there is temptations.
We have a saying the finance industry..."Follow the money" As a finance professional, my view may be biased, but audits don't have to be complicated. But I would also propose that there are records and notes that a secretary and treasurer can make throughout the year to make the audit a smooth process. In other words, do the records make it easy to follow the money or does the treasurer keep an envelope with the entire years receipts? Which do you think is simpler to audit? Another example: any reimbursement to a brother should be accompanied by a simple form that is completed and filed each month. On that form we tie back the expense to the annual budget so the audit can easily see the approval chain. The minutes record all incoming money due to the lodge. Every check, paypal or cash payment received is recorded in the minutes. Yes, you can certainly write receipts between the Secretary and Treasurer to follow the chain of custody. Double custody isn't what protects the lodge. Disclosure and transparency are much more powerful. The bottom line is to examine the monthly bank statement to see the deposit matches back to what was recorded in the minutes.
In other words - an ounce of prevention each month is way better than a pound of pain at the end of the year. An audit is simplified based on the record keeping and statement disclosure throughout the year. How do you know? Just answer one simple question to determine how easy the audit will be. Could anyone in your lodge pick out any transaction in a calendar year and easily 'follow the money' from beginning to end?
The flow of money always presents a temptation to siphon a tad here and there. "I will not cheat, wrong, or defraud.." is not always a barrier to that temptation. This is not to disparage our Brethren, merely to point to the dangers of the snares awaiting the incautious. Annual audits, at the very *least* show that the Lodge cares about the ebb and flow of monies, and keeps careful track of where the money comes from and where it goes. We are very fortunate in my home Lodge to have outstanding officers in our Secretary and Treasurer. We are also fortunate to have a substantial amount of money in our treasury, and we like to keep track of it. Periodic audits are a good way to ensure that our funds are being used wisely. The Master forms an audit committee every year. That team examines the minutes, the books, and the reports from financial institutions to trace funds in and funds out. The only change I would make would be to a periodic property inventory, as well. All the chairs, tables, kitchen equipment, aprons, jewels, furniture, and real estate are worth a LOT of money. We should keep track of that, as well.
There is one use case where the best practical choice for a Lodge is to forego an audit rather than go through the motions of performing, approving and presenting an ill-prepared audit report to the Lodge members: resource limitations.
In other words, it is better report to the Lodge that there are not enough qualified resources to perform a meaningful audit in compliance with WMC rather than to do a well-intentioned-but-less-than-adequate audit.
The former sets a red flag with Lodge members and GL and should be viewed as an earnest invitation/opportunity for outside help. Whereas, approving and reporting a sub-standard audit for the sake of checking the box each year creates a false representation that no errors or misappropriation exists. When the same three trusted-but-unqualified Masons volunteer to audit the same SecretaryTreasurer's books year after year, it's just too easy for the members to get complacent about facts, findings and finances.
In this case, which decision shows integrity of the leaders and which is a violation of trust?
(a) the Lodge Finance Committee realizes their lack of ability and omits or delays an audit until such time as it can be performed properly OR
(b) discovering the last 5 years of Lodge audits are a sham?
IMO, this is one area where Grand Lodge of Washington can strengthen the integrity of Lodge finances throughout the jurisdiction by REQUIRING Lodge audits to conform with the WMC template and ensure Lodges follow-up and report on audit findings. Some Lodges may see that as relief and ask for assistance.
--edited for format
A simple system is the secretary keeps a cash book and at the end of the meeting annotates all money received and gives money to treasurer. Treasurer recounts the money, writes any checks needed to pay bills for the next month. These are recorded in sec cash book as well. Once both are double checked, the secretary and treasurer sign that entry. Monthly bank statements are provided to be included in the minutes. Audit at the end of year is simple. Compare bank statements with cash book.
Audits don’t have to be hard.