## Audit of Clubs

### Income Side

#### Entrance Fees & Subscriptions

Verify application forms for new members against entrance fee receipts.
Check subscription receipts against counterfoils.
Carry forward arrears of subscriptions — verify opening balances match prior year.
Test arithmetical accuracy of subscription schedules.
Identify irrecoverable member dues — steps for recovery must be documented, and amounts ultimately irrecoverable must be disclosed in the Audit Report.

### Expenditure Side

#### Purchases (Food, Beverages, Supplies)

Trace purchase entries through to inventory records.
Verify inventory physically and reconcile with the inventory register.
Check sales pricing and margins earned — ensure pricing policy is applied consistently.

### Investments

Verify current market value of investments.
Check that investments are in safe custody (physical or demat).

### Governance Checks

Review management powers vs. secretary's financial powers — if secretary has exceeded delegated financial authority, flag it.
Obtain managing committee confirmations for significant transactions.
Check minutes for authorisation of major expenses and investments.

Worked example

### Example 1

Irrecoverable Subscriptions:

A club has 5 members with outstanding fees for 3+ years. The auditor should verify that the club has taken steps for recovery (reminders, legal notice). If amounts are deemed irrecoverable, they must be written off with committee approval AND specifically mentioned in the audit report — not simply left as debtors.

### Example 2

Secretary Exceeding Powers:

The club's rules permit the secretary to authorise expenditure up to ₹50,000. The auditor finds a repair bill of ₹1,20,000 signed only by the secretary with no managing committee resolution. This is an excess of authority — should be flagged.

⚠️ Common exam mistakes

Failing to trace subscription arrears brought forward from the prior year — these are often understated.
Not checking whether irrecoverable dues are disclosed in the audit report (disclosure is mandatory).
Ignoring whether the secretary has exceeded their delegated financial powers.
Skipping physical inventory verification — clubs with restaurants/bars carry significant F&B stock.

Reference:

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