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Financial Controls for Every Church

As discussed in this edition’s primary article, churches are increasingly offering electronic or digital giving options. However, regardless of the giving method, there are several basic financial internal controls that every church should consider in carrying out its stewardship responsibilities. These controls can be boiled down to a single key concept: segregation, or separation, of financial duties, so that no one individual has access to all. Examples of segregation of duties include:

  • Rotate a team of ushers involved in the collection of offerings;
  • Rotate counting team involved in the counting of offerings;
  • Checks are immediately stamped with a restrictive endorsement (“for deposit only”). Cash or checks are deposited with the bank;
  • Check preparer does not have signing authority on checks;
  • No blank checks are made available to those with signing authority;
  • Dual signatures are required on checks over a specified dollar amount;
  • Bank statements are directed to, and opened by, an individual not involved with check preparation;
  • Regular reconciliation of bank statements and payroll records;
  • Purchases over a specified dollar amount require approval by a designated church representative;
  • Oversight of financial reporting by the church finance committee or board; and
  • Annual audit or financial review by a CPA or accountant uninvolved in the church’s financial processes.

Also, given the sensitive nature of the position, your church may wish to consider background screening, such as a criminal background check and credit history for those involved with the church’s finances.

Keeping a good internal control structure in place helps your church protect the funds graciously donated by members and guests, guards the church’s integrity and reputation in the community and protects the workers and volunteers involved in the church’s financial ministry.

© 2024 GuideOne Insurance. GuideOne® is the registered trademark of the GuideOne Insurance Company. All rights reserved. This material is for informational purposes only. It is not intended to give specific legal or risk management advice, nor are any suggested checklists or action plans intended to include or address all possible risk management exposures or solutions. You are encouraged to retain your own expert consultants and legal advisors in order to develop a risk management plan specific to your own activities.