Form #1295 — The Annual Council Audit

What Form #1295 actually does

Fellow FS/Trustee — if you're new to #1295, here's the short version. Once a year, the three Trustees audit the council's books, complete Form #1295, sign it alongside the GK, and file it with Supreme. That audit is what Supreme uses to confirm your council is financially sound.

One filing per year:

• Annual audit: covers the full fraternal year, July 1 – June 30. Due August 15.

(Historical note: this form was filed twice a year as #1295A — a "first-half" audit due February 15 and a "second-half" audit due August 15 — before Supreme consolidated to a single annual filing. If you're looking at older council records, that's why you'll see two files per year in the archive.)

---

Why #1295 exists

The Order is a fraternal benefit society with IRS 501(c)(8) status. That tax status comes with real governance requirements — councils can't just sit on member dues and Per Capita remittances without independent oversight.

#1295 is the mechanism. It:

• Forces independent review of FS and Treasurer work (Trustees are independent of both).
• Catches errors early (small audit findings are cheaper to fix than year-end disasters).
• Creates a paper trail for Supreme's aggregate audit of the Order's finances.
• Is a Good Standing requirement — miss the audit, drop out of Good Standing.

Audits are a feature, not a tax. Treat them that way.

---

Who does what

Trustees (three):

• Conduct the audit — review records, verify balances, compare bank statements to ledgers.
• Flag exceptions or unusual items.
• Sign the completed form.

Financial Secretary:

• Provides all ledgers, statements, receipts, voucher copies for the fraternal year.
• Answers Trustee questions about entries.
• Reconciles any discrepancies the Trustees surface.

Treasurer:

• Provides bank statements and cashbook.
• Confirms balances match FS ledger.

Grand Knight:

• Signs the completed #1295 alongside the three Trustees.
• Acknowledges any findings and ensures resolution.

---

What actually gets audited

At a working-council level, the audit covers:

1. Cash and bank reconciliation

• Opening balance (prior fraternal year's ending balance).
• Receipts — dues collected, Per Capita flows, event income, donations received.
• Disbursements — Per Capita paid to Supreme and state, vouchers executed, operating expenses.
• Closing balance — matches bank statement + outstanding items.

2. Per Capita compliance

• Supreme assessments (Per Capita Tax + Catholic Advertising + Culture of Life) remitted for both levies.
• State Per Capita remittance verified.
• Any delinquencies flagged.

3. Voucher trail

• All disbursements above your council's threshold traced to signed vouchers.
• GK authorization on each voucher.
• Matching receipts or invoices attached.

4. Special funds

• Separate accounts (building funds, scholarship funds, etc.) reconciled independently.
• Intra-account transfers documented.

5. Roster accuracy

• Member count matches Supreme records.
• Dues billed match roster.
• Suspensions for non-payment documented properly.

---

The 3-way reconciliation

The core mechanical check:

1. FS ledger — the council's internal books.
2. Treasurer cashbook — what the Treasurer shows disbursed and received.
3. Bank statement — what actually cleared.

All three must reconcile. If FS says balance is $10,450, Treasurer says $10,450, and bank statement says $10,520 with $70 in outstanding checks, that's a clean reconciliation. If any of the three don't tie, the Trustees surface it, FS investigates, and resolution is documented before the audit is signed.

A #1295 with "no findings" and a 3-way mismatch is a bad audit. Trustees who sign anyway take on liability they shouldn't.

---

Common findings (small and fine)

Real audits find small things. Examples:

• Voucher missing for a $40 office supply purchase. Fine — attach receipt, note in audit.
• Per Capita remittance timing difference. Payment cleared on April 12 instead of April 10 — cosmetic, document and move on.
• Roster member count off by 1. Reconcile with Member Management, fix in FS records.
• Receipt book page missing. Document as known loss; ensure future receipts are scanned as backup.

These are the findings of a functional audit. Councils that never find anything aren't auditing — they're rubber-stamping.

---

Major findings (rare and serious)

Occasionally, audits surface real problems:

• Unexplained cash withdrawals. Must be traced and documented.
• Missing Per Capita payments. Must be paid before sign-off.
• Undeposited dues collections. Serious — investigate whether funds are recoverable.
• Large unvouchered expenses. Must be authorized retroactively by council vote or flagged as exception.

If major findings surface, Trustees coordinate with the GK. Serious unresolved findings escalate to the state deputy.

---

Common mistakes

• Skipping the actual review. Signing a form without opening the bank statements is the single worst audit failure. Don't do it.
• Late filing. #1295 late = council out of Good Standing. Start the audit 30 days before the August 15 deadline — early July is the right window.
• All three Trustees not present. The form requires three Trustee signatures. If one is unreachable during audit season, the other two can do the mechanical work, but the third still needs to review before signing.
• Audit happens in the FS's office, unsupervised. Audits should be conducted with FS present to answer questions — but Trustees should drive, not the FS.
• Not documenting findings even when minor. "No findings" on every audit is suspicious. Note the small stuff; it proves you looked.
• Waiting until July 1 to start. The fraternal year ends June 30; records are fresh then. Don't let them go stale while you wait for the "audit window."

---

One more thing

The councils with strong audit cultures have Trustees who treat it as partnership, not inspection. The FS prepares clean records; the Trustees find small stuff; everyone signs; Supreme is satisfied; no drama. That culture takes one or two good audit cycles to establish and protects the council for decades.

The councils with weak audit cultures are one bad year away from a real problem. Don't be that council.

Audit honestly. Document findings. Sign what you've verified. That's the whole job.

---

Source notes. Draws on Supreme Council Form #1295 instructions, Charter, Constitution and Laws (Order L&R) Trustees section, and standard fraternal benefit society audit practice. Send feedback if anything's off.

Last reviewed: April 21, 2026. Fraternal year 2025–26.