Which Files Should a Foundation Prepare Before a VGM Inspection?

Inspection, Compliance and Termination

Prepared by: Constantinople

Preparing for a foundation inspection is not completed merely by the accountant sending a balance sheet. Compliance of activities with the deed and law, use of income for the purpose, administrative resolutions and any enterprises' transactions may be examined together. Internal audit and Directorate General of Foundations supervision differ; one does not eliminate the other. According to VGM guidance, internal audit is performed within six months of year end; its report and results are sent to the relevant regional directorate within two months following the report date.

Organise the deed and amendments, current administrator details, resolution books, bank accounts, donation documents, expenditure evidence, property records and earlier inspection correspondence. Include branch and representative-office transactions where applicable. Creating missing documents with retrospective dates or writing inaccurate resolutions is not a solution. A document never having been drawn up differs from an existing document being untraceable in the archive; explanations should reflect that distinction.

Requests in the inspection letter should be matched with the foundation's specific obligations and available records. If a letter has a deadline, retain the delivery and service date and read its scope before responding. Rectifying a finding, an allegation of liability and the possibility of sanctions are assessed separately. A lawyer's review does not replace a financial audit; it focuses on legal decision-making, representation and defence.