In Washington, each Lodge is supposed to have its financial records audited each year.
Yet, far too often, we find Lodges losing significant funds to theft. In most of these cases, the thefts have taken place over the course of years, and would have been caught early if audits had been done as required.
When a Mason is found to have taken Lodge funds, he is of course suspended/expelled from Masonry. But nothing is ever done to the Masters who did not ensure audits were done as required.
When money is found to have been taken from a Lodge, and when it is clear that audits that would have caught it were not done, should the responsible officers face Masonic discipline as well?
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In North Carolina, the Audit is performed by the appointed finance committee, and the Treasurer and Secretary are separately keeping their own General ledgers The Secretary's' compared to the receipts from he treasurer, and the Lodge minutes. The Treasurers which are compared to the bank statements and receipts from the Secretary . Beware any Secretary or Treasurer who does not willingly comply to financial requests. It happens even here. The Committee does not do its job and the lodge suffers. In terms of an audit the auditor is accountable to the audit. If none is done that's on the Master.
Having an audit completed is one of the first duties a new Master should direct to be completed. The same is true for the President of the Temple Board. If audits are not done, and money is found to be missing, then yes, the Master(s) who failed to call for an audit should face discipline. Failure to be a good steward of a Lodge’s assets is as bad as being the one who stole the assets. To choose to not call for an audit because “Brother Treasurer” has been doing the job forever and if he gets mad and quits there isn’t anyone willing to take his place should be cause for discipline. While we’re on the subject, I’ve never understood why a “smaller” lodge is allowed to combine the Treasurer and Secretary offices. It clearly goes against the ritual. If a lodge is unable to seat both officers, then again, hard conversations and decisions need to be had. This is one area that I feel GL should take a harder stance and become more involved. We complain about our meetings spending too much time talking about business, but when we fail to run our Lodge finances as a business, then our meetings could well be taken up with discussions about closing the doors.
Well, let's address the punishment of the auditor first. No one in their right mind who is not a certified CPA would ever agree to be an auditor, knowing that if he misses anything, he'd be expelled from the fraternity. Much like everything else, a WM usually has a hard enough time finding people to actually want to do an audit, putting that sort of added pressure would make it worse. The people assigned to do that job aren't professionals, they are volunteers trying to help.
Generally, whoever is embezzling funds from the lodge will manage to pass a cursory audit First, 99% of the time it's a lodge with a secretary/treasurer, one person entrusted to manage it all. Second, they won't simply withdraw money from an ATM. The person who stole from the temple board down in vancouver did it by writing checks to himself instead of, say, paying the property taxes. He passed audits for something like seven years. It wasn't the first time he had done this to a lodge, and because there is no national database of expelled members, after his short stint in jail, he can move and do it again in another jurisdiction.
Years ago I was asked to be a treasurer of a now dead lodge, and I resisted agreeing to do it for months. I am terrible with math, and only said ok after knowing that they didn't have any other choice. The secretary and I worked very hard to fix the poorly managed/neglected accounts and established our system that kept everything current down to the last penny, in spite of my poor math skills. But the key here is having the secretary/treasurer roles separate, and accountability from both sides for all money going in and out. And if you're worried about mismanagement, spend the added money to hire a professional to handle it.
The practice of having a Lodge perform an audit on itself has seemed to me to be a case of "fox guarding the coop." Yes, we obligate ourselves to not "cheat, wrong, or defraud" ourselves, yet it still happens with unscrupulous men, just as it happens in all other walks of life. How about establishing an audit team within each District, rotating members every few years, just like our Temple Boards? And I agree with WB Glenn that to have one person fulfill the duties of both Secretary and Treasurer is just asking for trouble. I am most certainly *not* a forensic accountant, but I can read a well-kept ledger and add and subtract with the best of them!
Frankly, it is my view that a Lodge should, in most cases, hire a professional to take care of this.
In my Lodge, I was appointed to an audit committee once. Me and the other two guys took a look at everything, and it quickly became perfectly clear that we didn't have any idea of what we were doing.
So, we decided to ask a Brother with the proper background, from a neighboring Lodge, to audit the books on our behalf.
The next year, the audit committee brought in a professional to handle it, and to the best of my knowledge, the lodge has relied upon professional help for its yearly audits ever since.
Personally, I think that is the best way to do it.
In North Carolina, the Audit is performed by the appointed finance committee, and the Treasurer and Secretary are separately keeping their own General ledgers The Secretary's' compared to the receipts from he treasurer, and the Lodge minutes. The Treasurers which are compared to the bank statements and receipts from the Secretary . Beware any Secretary or Treasurer who does not willingly comply to financial requests. It happens even here. The Committee does not do its job and the lodge suffers. In terms of an audit the auditor is accountable to the audit. If none is done that's on the Master.
Having an audit completed is one of the first duties a new Master should direct to be completed. The same is true for the President of the Temple Board. If audits are not done, and money is found to be missing, then yes, the Master(s) who failed to call for an audit should face discipline. Failure to be a good steward of a Lodge’s assets is as bad as being the one who stole the assets. To choose to not call for an audit because “Brother Treasurer” has been doing the job forever and if he gets mad and quits there isn’t anyone willing to take his place should be cause for discipline. While we’re on the subject, I’ve never understood why a “smaller” lodge is allowed to combine the Treasurer and Secretary offices. It clearly goes against the ritual. If a lodge is unable to seat both officers, then again, hard conversations and decisions need to be had. This is one area that I feel GL should take a harder stance and become more involved. We complain about our meetings spending too much time talking about business, but when we fail to run our Lodge finances as a business, then our meetings could well be taken up with discussions about closing the doors.
Well, let's address the punishment of the auditor first. No one in their right mind who is not a certified CPA would ever agree to be an auditor, knowing that if he misses anything, he'd be expelled from the fraternity. Much like everything else, a WM usually has a hard enough time finding people to actually want to do an audit, putting that sort of added pressure would make it worse. The people assigned to do that job aren't professionals, they are volunteers trying to help.
Generally, whoever is embezzling funds from the lodge will manage to pass a cursory audit First, 99% of the time it's a lodge with a secretary/treasurer, one person entrusted to manage it all. Second, they won't simply withdraw money from an ATM. The person who stole from the temple board down in vancouver did it by writing checks to himself instead of, say, paying the property taxes. He passed audits for something like seven years. It wasn't the first time he had done this to a lodge, and because there is no national database of expelled members, after his short stint in jail, he can move and do it again in another jurisdiction.
Years ago I was asked to be a treasurer of a now dead lodge, and I resisted agreeing to do it for months. I am terrible with math, and only said ok after knowing that they didn't have any other choice. The secretary and I worked very hard to fix the poorly managed/neglected accounts and established our system that kept everything current down to the last penny, in spite of my poor math skills. But the key here is having the secretary/treasurer roles separate, and accountability from both sides for all money going in and out. And if you're worried about mismanagement, spend the added money to hire a professional to handle it.
The practice of having a Lodge perform an audit on itself has seemed to me to be a case of "fox guarding the coop." Yes, we obligate ourselves to not "cheat, wrong, or defraud" ourselves, yet it still happens with unscrupulous men, just as it happens in all other walks of life. How about establishing an audit team within each District, rotating members every few years, just like our Temple Boards? And I agree with WB Glenn that to have one person fulfill the duties of both Secretary and Treasurer is just asking for trouble. I am most certainly *not* a forensic accountant, but I can read a well-kept ledger and add and subtract with the best of them!
Frankly, it is my view that a Lodge should, in most cases, hire a professional to take care of this.
In my Lodge, I was appointed to an audit committee once. Me and the other two guys took a look at everything, and it quickly became perfectly clear that we didn't have any idea of what we were doing.
So, we decided to ask a Brother with the proper background, from a neighboring Lodge, to audit the books on our behalf.
The next year, the audit committee brought in a professional to handle it, and to the best of my knowledge, the lodge has relied upon professional help for its yearly audits ever since.
Personally, I think that is the best way to do it.