Generally Accepted Accounting Principles (GAAP) is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.


The Grand Lodge's Financial Reporting System (FRS) is an effort to improve the recording and reporting for the Lodges. Improved reporting will improve financial decision making which will make the Elks more successful. We encourage everyone to get behind this effort 100%. The FRS includes a standard chart of accounts.


Method of Accounting is Accrual. The year end is March 31.



Who is in charge?

One of the common issues at the Lodges, is who is charged with the responsibility of making sure the Lodge is following GAAP and the FRS. Who decides what accounting procedure and reporting shall be used?


The Grand Lodge Auditing and Accounting manual says:


"1-111. Responsibility for Accounting System:

 In the interest of good business practices and ensuring effectiveness of the system, responsibility for managing it should be assigned to one individual Lodge Officer. This should be the Treasurer or, in some Lodges, the Secretary. Each Lodge should make the determination. Centralized responsibility is necessary whether bookkeeping functions are performed by an officer or employee, on a Lodge-owned computer, or by a computer service firm."


This guidance is seldom followed. The result is many people try to make accounting policy resulting in a system that is a perfect example of GIGO (garbage in - garbage out).


What this guidance means is one person shall be the final authority of what the accounting and reporting procedures will be. This is true for every function of the Lodge. Secretary, House committee, the Board, and all other areas. These other groups should not be determining what the accounting procedures will be.


We recommend that the Lodges take this as a very serious issue.



In this help section we are trying to offer guidance on some of the issues that we have found to be common among the Lodges. We are not trying to discuss all issues or all possible solutions, but rather the simplest solutions (KISS) and the most prominent issues.


Internal Control: Internal controls are the mechanisms, rules, and procedures implemented by a Lodge to ensure the integrity of financial and accounting information, promote accountability and prevent fraud. The person responsible for the Accounting System is responsible to ensure the Lodge has adequate Internal controls. That person needs to be aware of the Internal Control laws of the order. In addition, additional Internal Controls will normally be needed by the Lodge. If necessary Professional advice should be sought.



Materiality: In accounting, materiality refers to the impact of an omission or misstatement of information in an entities financial statements on the user of those statements. ... The Lodges need not apply the requirements of an accounting standard if such inaction is immaterial to the financial statements.



Professional Help.        There are many subjects that are outside the scope of this documentation. Lodges should consider, if necessary, contacting professional help on subjects they are not familiar with. Some example of such subjects are:


Year end work.

Having more than one set of books.
Federal Income and 990 filings.
Payroll tax requirement and fillings.

1099 and other filing requirements.

Accounting for marketable securities.

Internal control issues.