30 Nov Segregation of Accounting Duties With a Small Church Staff
If your church has made the difficult decision to reduce staff levels, you may find yourself scrambling to ensure proper accounting checks and balances with fewer employees.
An effective accounting control system is dependent upon proper and adequate segregation of duties. Accounting tasks, particularly those involving cash transactions, should be performed by a team rather than a single person to limit the possibility or even the appearance of the misuse of funds. This can be tricky with a small staff.
Here are a few key steps you can take to segregate duties or mitigate risks with a small accounting department:
– Have a volunteer or an employee with no other accounting duties perform the bank reconciliations each month. Additional oversight of the bank reconciliations is an effective mitigating control when you cannot segregate cash receipts and cash disbursement duties.
– Have a volunteer or an employee with no other accounting duties prepare all checks for mailing after they’ve been signed.
– Have a finance committee member perform internal audit procedures on a periodic and unannounced basis. These procedures could include tracing amounts on the offering count sheets to amounts deposited to the bank or examining cash disbursement records for completeness and accuracy.
Ensuring that you have proper checks and balances in place will not only protect the church but will also protect employees from unwarranted accusations of wrongdoing. Although segregating duties can be difficult with a small staff, it is of the utmost importance!
This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.