We have reviewed the annual financial report of the Church as of 31 December 1985 and the operations for the year then ended. The financial statements and operations reviewed by the committee include the general funds of the Church and of other controlled organizations, the accounts of which are maintained by the Finance and Records Department of the Church. We have also examined the budgeting, accounting, and auditing procedures employed and the manner in which funds are received and expenditures are controlled. We determined that expenditures of general Church funds were authorized by the First Presidency and by budgetary procedures. The budget is authorized by the Council on Disposition of Tithes, composed of the First Presidency, the Council of the Twelve, and the Presiding Bishopric. The Appropriations Committee, in weekly meetings, administers major expenditures under the budget.
Modern accounting technology and equipment are employed by the Finance and Records Department and other departments in keeping abreast of rapid Church expansion and changing methods of electronic data processing.
The Auditing Department, which is independent of all other departments, functions in the threefold capacity of performing financial audits, operational audits, and audits of the computer systems employed by the Church. These services are performed on a continuing basis for Church departments and other Church-controlled organizations, the accounts of which are maintained by or under the direction of the Finance and Records Department. These comprise worldwide operations including missions, schools, administrative offices, and departmental activities. The extent and scope of the Auditing Department services in safeguarding the resources of the Church are expanding to encompass the growth and widening activities of the Church. The audits of local funds of wards and stakes are performed by stake auditors, the reports of which are reviewed by the Church Auditing Department. Incorporated businesses owned or controlled by the Church, for which accounts are not maintained in the Finance and Records Department, are audited by an internal staff of certified public accountants, independent professional auditing firms, or government regulatory agencies.
Based on our review of the annual financial report and other data, and our study of the accounting and auditing methods by which financial operations are controlled, together with continuing discussions with personnel of the Finance and Records and Auditing departments and Church legal representatives, we are of the opinion that the general funds of the Church, received and expended during the year 1985, have been properly accounted for in accordance with established procedures outlined herein.
CHURCH AUDIT COMMITTEE
Wilford G. Edling
David M. Kennedy
Warren E. Pugh
Merrill J. Bateman
Ted E. Davis