By; @Kristin Withrow
For many small special districts, “audit season” can feel like a scramble. Files are pulled together, numbers are double-checked, and staff—often wearing multiple hats—try to make sense of it all under tight timelines. But according to Samantha Prall, Managing Director at Platinum Strategies Inc., audits don’t have to be stressful.
“An audit is essentially a review of your financial records to make sure everything is accurate and reported correctly,” she explains. “It happens annually, and many districts bring in outside help to get ready.”
That preparation often begins earlier than people expect. Auditors typically conduct interim testing in May or June, reviewing selected transactions and processes before the fiscal year closes. That means the groundwork for a smooth audit really starts months in advance—and a few consistent habits make the process easier.
Best Practice #1: Stay Audit-Ready All Year
The single most effective way to make audits easier is also the simplest: keep your books current.
“The best way to stay in shape is to reconcile your balance sheet every month,” Prall says, noting that in governmental accounting, this is now referred to as the statement of net position. “If you’re doing that regularly, you’re not trying to catch up at the end of the year.”
Monthly reconciliation ensures that your accounts—cash, liabilities, and other balances—match your supporting records. It’s also the best way to catch small errors before they become big ones.
One area where mistakes often occur is at the end of the fiscal year, particularly with payroll. Districts need to properly account for the final month’s wages, as well as compensated absences like vacation and sick time. These liabilities can be easy to overlook or miscalculate, but they are critical to getting your financial picture right.
Another common challenge is timing expenses correctly. Prall points to something as routine as a CSDA membership payment. “If you pay annually, part of that expense may apply to the next fiscal year,” she explains. “You need to break that into what’s used this year and what’s prepaid for next year.”
Keeping a simple schedule of prepaid and recurring expenses can help ensure those amounts are allocated correctly—and save time when auditors ask for documentation.
Best Practice #2: Stay Organized (Even for Infrequent Things)
Not everything happens monthly, which makes organization even more important.
Capital assets are a good example. These larger purchases, such as equipment or infrastructure, aren’t tracked in the same way as routine expenses - but they still need to be accounted for accurately. Maintaining a clear record of what was purchased, when, and at what cost can prevent last-minute digging.
The same goes for major projects. Large construction or improvement efforts often involve multiple invoices over time. Keeping those documents organized and easy to reference ensures you can quickly support the totals reported in your financials.
For small teams, this doesn’t have to mean complex systems. Even a well-labeled digital folder structure or a simple tracking spreadsheet can make a big difference when it’s time to pull information together.
Tip #3: Know When to Ask for Help
For many districts, limited staff capacity is the biggest challenge. That’s where being realistic—and proactive—can make all the difference.
“If you start falling behind, it’s a lot harder to catch up,” Platinum Strategies Managing Partner Josh Byerrum cautions. “If you don’t have the time to do it monthly, either seek outside assistance or plan to do it at least quarterly.”
Timing matters. As audit season approaches, firms that provide accounting support often fill up quickly. Waiting until the last minute can limit your options and increase stress.
Byerrum recommends using the midpoint of your fiscal year as a check-in. If you’re current on reconciliations and records, you’re likely in good shape. If you’re months behind, it’s a clear signal to bring in help before the gap grows.
A Steady Approach Pays Off
For small districts especially, the goal isn’t perfection. It’s consistency. A steady approach—monthly reconciliations, organized records, and timely support when needed—can turn audit preparation from a stressful rush into a manageable, routine process.
With a few practical habits in place, audit season becomes less about catching up—and more about confirming that you’ve been on track all along.
Platinum Strategies Inc., a CSDA Platinum Business Affiliate, provides customized finance and accounting solutions for special districts, including monthly closes, financial reporting, budgeting, audits, payroll, and internal controls. Learn more at platinumstrategiesinc.com.
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