Yes, an audit should be a routine activity at the end of the year. Many of us assemble a committee of 3 or more people not generally associated with the PTO finanances (and not being authorized to sign checks).

The old treasurer hands over all the books, bank statements, and supporting documentation to the audit committee.

At a minimum, the audit committee verifies that the books balance. But usually they do more - verifying that proper procedures were followed. Did every outgoing expense have a reimbursement form/proper documentation to back it up? Do all cash receipts show two people counted and verified amounts? Were all checks signed by two people? Were all expenditures matched to a budget item and/or approved in the minutes? etc., etc.

When done, the committee writes an audit report (could be a very simple one page memo, could be more complex) attesting to the state of the books and any concerns or recommendations for changes/tighter controls.

Go into "Search" and enter keyword "audit". You'll find some great information in previous postings.

Does anyone have an audit done each time a new treasurer takes over? Our new treasurer wants an audit done before he takes the books over. I told him that we don't have the money to have an audit done and that one was done about a year ago. Each time an audit is done the auditors are looking at a range of time and the person responsible for that time will be accountable for any mishandlings of money if it should come up during an audit.