Internal Controls for Churches and Small Nonprofits

First, two unrelated people count the offering or the deposit, and both sign the count sheet. Second, the person who writes checks is not the person who reconciles the bank statement. Third, someone on the board or committee who doesn't handle money looks at the actual bank statement every month. Fourth, spending above a set amount needs two approvals. Fifth, every account is reconciled every month by someone outside the day-to-day, which is usually me.

That's it. Five habits. They don't cost anything, and they protect the treasurer and the secretary more than anyone, because nobody can ever accuse them of something the records don't support.

When I reconcile the bank account, I see every transaction, including the ones nobody meant for me to see. That's not suspicion. It's the same thing a bank does with its own tellers. Having the monthly reconciliation done by someone who isn't in the building is the single strongest control a small organization can add, and it comes with the bookkeeping.

Usually it's a mistake: a duplicate payment, a deposit that never made it to the bank, a subscription nobody cancelled. I flag it, we fix it, and the control that caught it keeps working. When it's more than a mistake, you'll know early, with documentation, instead of years later.