15. accountingpicoct

By Delano Sherley

Here are some additional internal controls to implement in order to safeguard church assets:

  • Segregation of duties is important for proper internal controls. The person receiving the money and making deposits should be different than the person dispersing the money (paying bills, etc.)
  • It is also important for someone other than those that handle funds (receiving or dispersing) to reconcile the bank accounts. At a minimum, someone else should review the bank statements each month before they are reconciled. This one simple policy will discourage some possible embezzlement schemes.
  • With the exception of petty cash transactions, all bills should be paid via a written or electronic check.
  • Cash offerings should never be used to pay for expenses or to cash personal checks.
  • Someone other than the person writing the checks should approve expenditures, with the exception of regular monthly expenses such as loans, utilities, etc.
  • Proper documentation should be provided for all disbursements, whether by check, debit or credit card, or petty cash (copy of receipt, along with business purpose of the expense). This is required to also comply with the IRS rules for accountable reimbursement plans.
  • Never write a check out to “cash.”

For a checklist of these and other internal control issues, please contact us at the email below.

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