Hughey's Debits & Credits: Bookkeeping. Payroll. Taxes.

All posts tagged small church finances

Church CollectionIn smaller faith based organizations such as churches, there are usually more volunteers than paid workers. Consequently, there is high turnover in the treasurer position. After working with churches weekly, we have noticed three common mistakes that happen when trying to replace that person.

  1. Unqualified personnel – Most of the time, you just want the tasks to be completed. How hard could it be to collect money, count it, deposit and record it? So when someone volunteers or is volun-told (when someone else nominates you but you really didn’t have a choice) to become the new treasurer and is unqualified, things tend to get complicated. Instead of appointing the first person who volunteers, conduct simple background tests and provide proper training.
  2. No separation of duties – Indicative of being a small church, prior to becoming our client, the same person who opened the mail was allowed to make the deposits, pay the bills, and have full access to the bank account and debit/credit cards. This vulnerability created opportunities to do a lot of harm. Thankfully, no harm was done! Ensure that there are proper checkpoints and separation of duties to reduce the window of opportunity of theft and other illegalities.
  3. Too much trust – Here’s an example of too much trust that we witnessed upon being hired at a church. The secretary was in charge of purchasing supplies that the church needed. When items were needed, the secretary would tell the treasurer that a check was needed to buy the supplies. The treasurer would proceed to sign a blank check and provide it to the secretary. The secretary would endorse the check to herself and purchase supplies. The secretary was not required to bring a receipt after supplies were purchased. In addition, the treasurer did not reconcile the bank account monthly to see what was being spent. In every organization (yes even churches!), there should be fiscal policies in place to ensure that the accounting portion of the church does not go unattended.

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