I was asked the other day if internal controls are necessary for a small church that only has one volunteer doing their books. My reply was a resounding YES!  

 

Sadly, I continue to see and hear reports of even small churches and nonprofit organizations being hurt because someone misused or stole funds meant for good.

 

One of the most important internal controls you can put in place is not letting one person have access to "everything" (the collection, recording, and spending).

 

Even if you are a small organization and don't have but one person to do everything, you can put some controls in place such as hiring an outside bookkeeping firm to at least reconcile the accounts and look over your accounting file.

 

In fact that is my number one tip! Make sure someone other than the ones recording or spending the funds reconciles the bank and credit card accounts EVERY MONTH! See "Bank Reconciliation Steps" on my Financial Statements Preparation page.

 

See more "controls" you can put in place to help ensure that the funds given to your organization are being used for the purpose they were given for...

 

I had an interesting blog post regarding the legality of receiving a housing allowance if the minister lives in a parsonage. We also touched on how to report a parsonage and housing allowance, so I thought you might enjoy reading it and maybe even adding your thoughts on the subject =)

 

 

See this post on: Church owned Parsonage plus housing allowance, Can the same Pastor have both?