Audit Services
Circulation

How to Prepare for Your Newspaper Audit


The auditor assigned to your publication’s audit will contact you at least two weeks prior to his/her scheduled arrival. If you seek more advanced notice or there are specific dates when the audit cannot be conducted, please contact the audit manager immediately at (847) 605-0909.

AUDIT TIP:
The more documentation prepared in advance of the auditor’s arrival, the more efficiently the audit may be completed. Please ensure the information is prepared accurately and the flow of calculations or spreadsheets can be easily followed and supported.

Here is a list of items that, if prepared in advance, will assist the auditor in conducting an efficient audit. The first list identifies items essential to an auditor’s productivity. This should be your first priority. The second list identifies items that are required for the audit, but may be prepared after the auditor’s arrival, if preparation time is limited.

PLEASE NOTE: This list is not intended to be an all-inclusive list of the documents an auditor will review during the course of an audit. Rather, it is only intended to provide the publication with guidance regarding the items that can be prepared in advance.

PRIOR TO THE AUDITOR’S ARRIVAL (Essential)
1. Contact the audit manager immediately if you experienced any record keeping problems during the audit period or if any situation occurred that may prohibit the auditor from being able to verify the circulation data claimed on your Publisher’s Statements.

2. Ensure an adequate space is made available for the auditor to work. The area should include, at minimum:

  • A desk and chair in a clean, well-lit area - preferably near the records and/or individual the auditor will be working with.
  • Access to an electrical outlet (one for computer and one for printer minimum)
  • Easy access to a phone line
3. Ensure you have all worksheets and documents you used to compile the Publisher’s Statements for the audit period. This includes, but is not limited to:
  • Circulation Ledger – accurate, legible and complete
  • A copy of the worksheets you submitted to ABC to file the statement
  • Documentation to support all adjustments to your circulation figures in Paragraphs 1 & 2 (transfer of employee copies out of Home Delivery and into “Employee Copies” category, etc.)
  • Any ABC letters of approval for omitted days (See Rule C 2.7)
  • The reports used as a source to claim the new and renewal sales production information claimed in Paragraph 4. A summary accounting of orders received from special offers, premiums and combination sales should be available.
  • A copy of a daily and a Sunday newspaper in the audit period to support the basic prices claimed in Paragraph 5a. Copies of newspapers for the day before and after any basic price changes must also be provided.
  • A file containing a sample copy of all promotional materials used to solicit new and renewal home-delivery and single-copy circulation (telemarketing scripts, direct mail offers, upgrade notification letters, flyers, buckslips, internet offers, etc.).
  • Worksheets to calculate your 4% allowance disclosure and the documentation used to compile these worksheet figures. (See explanation of this “4%” policy)
4. Complete the Survey of Publication Practices.
  • This survey is intended to assist the auditor in proper planning of your audit. If it is not completed prior to their arrival, it could result in inefficiencies during the audit process. If you have not already received a copy of a blank survey from your auditor, you can obtain one online (Microsoft® Word® Document)
  • If a question can be answered using another document (i.e. chart of carrier rates), simply attach your document to the questionnaire and reference the attachment.
  • If you cannot complete some of the information, please be sure you contact the appropriate people/dept. within your organization for assistance.
  • If you need assistance understanding any questions, please contact your audit manager
  • Be prepared to discuss your survey with the auditor immediately upon their arrival.
5. Prepare Paragraph 3, Paragraph 3A and/or Paragraph 3B (See Rule C 7.12)
  • Paragraph 3 is required. The publication must then also compile 3A, 3B or both.
    • Paragraph 3 is an analysis of one date in the audit period (one Sunday and one daily required). It breaks down circulation by county for those counties with more than 25 copies distributed on that date. If a county has less than 25 copies, it should be included in “Miscellaneous Counties.”
    • Paragraph 3A is an analysis of the same date(s) in the audit period. It breaks down circulation by town for those towns with more than 25 copies distributed on that date. This should be compiled in alphabetical order by county. If a town has less than 25 copies, it should be included in “Balance in County.”
    • Paragraph 3B is an analysis of the same date(s) in the audit period. It breaks down circulation by ZIP Code for those with more than 25 copies distributed on that date. This should be compiled in ascending numerical order. If a ZIP Code has less than 25 copies, it should be included in “Miscellaneous ZIP Codes.”
  • Please select a date in your audit period that is representative of your average circulation.
    • For newspapers published in the same city, the dates chosen for the Paragraph 3 analysis must be the same. See Rule C 7.12 (a)(2) for details.
  • All sections of Paragraph 3, 3A, and 3B should be compiled based on the point of delivery to the newspaper recipient (not carrier, motor route driver or distributor addresses).
  • Ensure the “Total” circulation for all sections of Paragraph 3 (3, 3A, 3B) match to each other.
  • Ensure the “Total” circulation for the Paragraph 3 date(s) match to the total circulation on your ABC circulation ledger for those date(s). If they do not match, be sure you can explain to the auditor why your circulation ledger does not reflect the same distribution as your Paragraph 3.
  • Maintain ALL of the records and worksheets used to prepare these paragraphs, including mail galleys, route lists, retail account invoices, and distributor surveys.
  • ABC rules require that Paragraph 3 data be prepared in advance of the auditor's arrival and sent to ABC before the audit. If you have not already provided your Paragraph 3 data or discussed it with your field auditor or technical review staff, please send the data to:

    Audit Bureau of Circulations
    Paragraph 3
    Att: Doreane Luszczewski
    900 N. Meacham Road
    Schaumburg, IL 60173

    Or, via (with attached Microsoft® Excel® file)

6. Request an “Nth factor” from the TRRP department in the Schaumburg office and prepare the subscriber sample information.
  • The “Nth factor” is a set of criteria issued by ABC allowing you to select a sample of Pay in Office Subscribers (also known as Office Collect, PIA, etc.) in advance of the auditor’s arrival.
  • Please select a date in your audit period that is representative of your average circulation. You may use a current date if the upcoming audit period has not yet ended.
  • Maintain a copy of this master subscriber file listing (electronic or hard copy). This list should include all home delivery, mail and electronic subscriber accounts. The listing should be in route order (mail and e-editions may be added to the end of the list).
  • Identify the total number of “active” office pay accounts on that date.
  • Complete the Nth factor Request Form (Microsoft® Word® Document) and submit to the TRRP department at ABC.
  • A letter or e-mail will be sent to you outlining the criteria you should use to select a sample of your office pay subscribers for the audit.
  • Select a sample per the instructions in your “Nth letter” from ABC. For each subscriber account selected in the sample, prepare a report or print subscriber account screens which clearly identify:
    • Name, address, account number
    • The most recent payment amount and date paid
    • The start date and expire date of the subscription associated with the most recent payment
    • Frequency of delivery (7-day, Sunday only, etc.) and term (length of subscription) ordered
    • All customer service notes (vacation stops, missed delivery, delivery stop and/or write-off, etc.) for at least the past year

PRIOR TO THE AUDITOR’S ARRIVAL (Beneficial)
1. Carriers, Motor Routes and Retailers

  • Ensure auditor has access to invoice detail for any billing cycle
  • Ensure auditor has access to payment documentation for any billing cycle
  • Ensure auditor has access to all surveys/affidavits for limited or non-returnable accounts
  • Maintain reports identifying non-collectible accounts and write-offs
2. Vending Machines (Employee Operated)
  • Ensure auditor has access to all lay down (in/out) sheets for the audit period
  • Ensure auditor has access to all cash collection documentation for the audit period
3. Hawkers
  • Ensure auditor has access to all hawker records to include - a list of all sales locations (specific intersections), number of hawkers at each location, names of hawkers, all financial transactions with hawkers, draw and return reports.
4. Independent Distributors/Agents
  • Compile a file with copies of all independent distributor contracts.
  • Ensure the auditor has access to all distributor circulation records, if necessary. This may include, but is not limited to, route lists, retailer lists, invoices, and payment records.
5. Compile a spreadsheet listing the debits and credits for your entire audit period, by billing cycle, for carrier/motor routes and single copy accounts.
  • Typically, at the conclusion of each billing cycle, the circulation or accounting department generates a billing summary report (i.e. “billing register,” “invoice summary”). At the end of each report, each debit and credit item is listed and the amount issued for each are identified.
  • Create a spreadsheet listing all billing cycles as columns across the top and each debit and credit item as a row. Input the total dollar amount associated with each item. Calculate the total dollar amount issued for each credit in the audit period. A sample spreadsheet may be found at http://www.accessabc.com/pdfs/sourcesused.pdf*
  • Maintain a copy of all documents used to compile these spreadsheets.
6. Hotel Programs
  • Compile and maintain copies of all documents that will support compliance with the type of hotel program you utilize. For assistance in identifying the type of program you have and place and the documentation needed, please view the “Guide to Hotel Programs” on our Web site at: http://www.accessabc.com/pdfs/hotelprograms.pdf*
7. Third-Party Sales 8. Educational Programs
  • Acquire and maintain affidavits from all teachers who received sponsored copies during the audit period. An example of an acceptable affidavit may be found in the Educational Programs Guide.
  • Ensure auditor has access to all orders from the teachers and all payment documentation from sponsors and schools.
  • Compile a file with copies of all promotional materials for all NIE fundraising efforts conducted during the audit period. This should include any written agreements with sponsors.
  • Ensure auditor has access to in/out sheets for all registered college student accounts, by drop location, for any billing cycle in the audit period
  • Compile a file with copies of all documentation to support any NIE Home-Delivery program.
9. Ensure the auditor has access to the general ledger for review and analysis of circulation income and expenses.

UPON THE AUDITOR’S ARRIVAL:
Make a point of introducing the auditor to members of your staff and inform them of their functions. This would include, but is not limited to, the persons responsible for the circulation ledger, carrier and dealer accounts, cash receipts and mail subscriptions.

If you will not be the auditor’s contact, please establish a liaison person who can fulfill document requests, supply the answers to the traditional questions, and is knowledgeable of the records and reports required by ABC.


*PDF files require the Adobe® Reader®. To download this free software, visit www.adobe.com.