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Keep the devil out of the details – contributions & bank statements

Proper procedures for your church’s contributions and bank reconciliations are another way to achieve segregation of duties and tight internal controls. The general ledger must be reconciled with the contributions modules monthly, and bank statements must be reconciled on a timely basis. Here are suggestions to maintain excellent internal controls in these two areas:

Contributions:

–         The counters should create count sheets, initial and provide a copy to personnel responsible for entry to contributions module, and then prepare the deposit.  The batch entry should be posted to the contributions module, printed, initialed and attached to the count sheet.  The deposit slip, count sheet, and contributions batch sheet should be reconciled and attached for proper evidence of the transactions.

–         Create two monthly summary reports: 1) contributions posted in the contributions module and 2) contributions posted to the general ledger. The business manager should reconcile the reports and note any discrepancies that need to be investigated. A further level of internal control is to have the church’s treasurer review the reconciliation report and add his or her approval.

Bank Reconciliations

–         Proper segregation of duties requires 3 separate people with specified responsibilities.  A person designated to receive the bank statement should be responsible for opening and reviewing the bank statement for unusual or irregular transactions.  This person should initial and date the statement for evidence of receipt and review.  A separate person should perform the bank reconciliation and initial and date for evidence of completion.  A third person, separate from the reconciliation process, should review, initial, and date the reconciliation and investigate any discrepancies related to cash.

–         Bank reconciliations should generally be done within 30 days of month end to avoid irregular items going unnoticed for extend periods of time.

When you have documented procedures in place and follow them, business details are kept in the clear and the opportunity or temptation for fraud are greatly diminished.

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