I was texted screenshots a bit ago of the report of a Director who received a letter from her state indicating that she is now being audited for her CC community business.
To be honest, my heart sank. The last thing that anyone needs is to have to deal with an audit. Mamas need to be fretting about teeth coming in, diapers being changed, and how to manage puberty with our sassy kiddos more than dealing with business procedures – except we chose to be mamas who own businesses as sole proprietors. Perhaps unwittingly, but business owners nonetheless who are responsible for exemplary business practices.
If you are stepping into any business, may I suggest it would be a good idea to know what types of records are required in an audit so you can begin with excellent bookkeeping skills at the outset and thus walk forward in confidence?
The letter that was photographed and forwarded from me was from Pennsylvania. It contained two pages of information and records that would be expected to be produced by the Director. I did a basic search of the Pennsylvania webpages and found this quote that rattled me based on what I know about standard operations in the organization in question: “Under the PA UC Law, an individual being paid for work he or she performs is presumed to be your employee. To rebut this presumption, you must show that the individual is free from your direction and control and is performing work for you as part of his/her independently established business. ” (Why are you Auditing Me When I Consider All of My Employees to be Independent Contractors? | Official Pennsylvania Government Website)
Not every state will have the same expectations, so to be prepared, do a search of how to prepare for a business audit in your state.
This link describes the types of things that are commonly asked for in an audit. (How to Prepare for a Business Audit | NoLo)
Carol Topp has made a name for herself with books, articles, and helpful advice as a HomeschoolCPA. Her website might be useful to anyone working through these issues or setting up new businesses – it’s the only one I know of that addresses issues like this specifically. (Starting or Running a Homeschool Group? | HomeschoolCPA)
Ultimately, please just know that while your heart might be moved to ministry, ministry is just the by product of your homeschool business. We can’t simply state that “the gov’ment is out to get us” or this is religious discrimination. Your community is a business and in this country businesses are regulated.