Audit: internal and external

An audit is an independent check that your SACCO's money, records, and controls are sound. There are two kinds, and a healthy SACCO uses both.

Why it matters: members trust you with their savings. Audits prove that trust is well placed, and catch small problems before they become losses.

Internal audit: the ongoing watchdog

• Done by the SACCO's own internal auditor, working independently of day-to-day management.
• Checks happen all year round, not just once.
• Tests whether controls are actually being followed: cash counts, loan approvals, reconciliations.
• Reports to the board or its audit committee, not to the managers being checked.

External audit: the annual independent opinion

• Done once a year by an outside, independent audit firm.
• Reviews the year's financial statements and gives a formal opinion on whether they are accurate.
• Brings a fresh, impartial pair of eyes from outside the SACCO.
• Helps assure members, lenders, and regulators that the accounts are trustworthy.

What auditors check

• Internal controls: are dual control, segregation of duties, and approvals working?
• Balances: does the cash, savings, and loan book match the records?
• Compliance: are policies and reporting rules being followed?

Act on findings and report regularly

• Treat every finding as a to-do, not a complaint. Assign an owner and a deadline.
• Track open findings until they are closed.
• Report audit results and progress to the board regularly, for example quarterly.
• Never let the same finding appear year after year.

In CAMS, transaction records and reports give auditors a clear trail to test against.

Quick checklist

• An internal auditor runs independent checks year-round
• An external firm audits the accounts annually
• Auditors report to the board, not to management
• Every finding has an owner and a due date
• Open findings are tracked until closed
• Audit results reported to the board regularly