Mon. Mar 8th, 2021

By David R. Pollock

“If it ain’t broke, don’t fix it!” While the slogan may be fine for a buggy whip factory, it doesn’t work for church finances. We must continually find ways to fine-tune money-handling procedures to insure a sense of financial integrity.

Complication: Since the typical church doesn’t have a staff CPA, the accounting tasks go to a bookkeeper or, more likely, a volunteer. But having a dedicated, solo worker – simple as it is – is not an advisable solution.

A Sensible System

Wise church leaders institute a basic system of checks and balances known as internal control. Such a system is meant to safeguard not
only the church’s funds but also the financial workers’ reputations.

Key element: Avoid having one treasurer do it all – count the money, make deposits, prepare checks, and then sign them. Reason: It’s not that people are suspicious; rather, a church wants to avoid having the treasurer be the prime suspect in the event there is a discrepancy, a shortage at the bank, or any accounting problems. When responsibilities are divided, troublesome concerns can be put to rest quickly.

Added advantage: This approach projects a positive image. When church members know their leaders are being careful stewards of church money, they feel more confident with their own stewardship commitment, giving freely with the knowledge their gifts are safeguarded.

Separate but Equal Tasks

So how do we diplomatically convince Tom Treasurer that he shouldn’t be handling all the financial chores – without him thinking the church wants him interrogated for embezzlement?

Key tactic: Use sensitivity in approaching any person already fulfilling financial responsibilities. Communicate that while the old method may not have been “broke,” it wasn’t the best system for everyone involved. Key concept: This change in money-handling routines is a means to protect financial volunteers, not to offend them.

First step: Begin with the handling of funds, which should be divided into two separate functions:

* Collecting money.

* Spending money.

Goal: To establish an audit trail, so that anyone taking a close look at how money is handled will recognize that internal control has been
built into the process.

Tip: Before any changes begin, stress that both tasks, while separate, remain equal in importance. Thus, no one feels demoted.

Safe Counting

Offerings must be handled with care. Key: No one person is ever in sole possession of the funds.

Procedure:

* In a secure area, one person separates the cash and checks from registration cards or other items.

* Another person counts the money and prepares a deposit slip.

* The first person then double-checks the count and the deposit figures.

* Some churches choose to place the funds promptly in a secure location, such as a small vault or safe. Others make a deposit at the bank immediately. Major reason: Avoiding loss by theft.

* Rotate money counters so that the same people aren’t handling funds every week. Note: This can be done with as few as three volunteers, using two each week.

Important: The church treasurer should not be present when the money is counted and deposited. Reason: If the one who keeps church books never handles the money, it takes a conspiracy for problems to occur: one party to take the money and the other to doctor the books.

Safe Spending

Three procedures help insure the proper disbursement of funds:

* Separating check-writing duties. Ideally, the one who prepares checks shouldn’t be entitled to sign them. Better: Allow someone else to process payments, and let the treasurer sign the checks. Reason: Again, two parties must act in collusion for problems to arise.

* Requiring two signatures. All checks – or at least drafts over a certain amount – should bear two signatures. Advantage: No one person can write himself a big check and then skip off to South America.

Disadvantage: The process of obtaining two signatures slows disbursements. Can you imagine being forced to run down two other parties to cosign your personal checks when you pay your bills?

Mistake: Many churches sidestep this obstacle by having several blank checks signed in advance for use during the following week – “just in case.” This procedure, while convenient, violates the principle of internal control.

Solution: Allow checks for smaller amounts (say under $250) to bear only one signature. This permits smaller payments to move through the system quickly, while checks for larger amounts remain until two signatures are gathered. Since all transactions must be reported monthly by the treasurer, even one-signature checks will be subject to eventual outside scrutiny.

Too Complicated?

Churches currently with one person handling the money (and that person difficult to recruit!) might wonder, Where are we going to find five dependable people each week?

Solutions:

* First, a small church requires only two counters on Sunday, and the counting task shouldn’t take more than a few minutes.

* The task of preparing the bills can be done either by the treasurer or a volunteer bookkeeper on his or her own schedule. Check signatures can be obtained after church or at another convenient time.

Key: Keep procedures as simple and painless as possible. Rotating these duties will break up the routine and help with the recruiting efforts by eliminating the perception of “lifetime commitments” to these jobs.

Worth considering: It is easier to find and train several people in simple, rotating tasks than to ask one person to assume responsibility for the entire set of tasks. Plus: The peace of mind for all involved is well worth the effort.

(The above information was published by YOUR CHURCH, July/August, 1993)

Christian Information Network

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