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                  TO:  All Ministries                                                                                                                                        FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                                           FILE:  0039-77/all

                   RE:  Financial Internal Controls Self Testing                                                                                     Originated March 2002                                           

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 PREFACE

        Before me is a magazine article written within the last decade about how a church was understandably 'stunned'  when they discovered that one of their Pastors was stealing from the church. Stealing of money from a church or like kind of ministry seems to happen all too often. 
        As stressed in this  Editorial , there seems to be a need at Ministries, especially among Churches, to take assurance steps to reduce the possibility that people are stealing money or fiscal resources from Ministries. The suggested Ministry Finance Integrity Pledge within this editorial would apply, of course, to any one involved in handling money receipts... at churches, it applies to ushers and counters and people taking event collections/payments off campus.  But most importantly, we believe a regular Test should be taken of your internal controls and/or checks and balances.  See the resources below:

TEST PROCESS

        You will note below that we have a Flagable (how about that for a word?) Topics List  for all types of Ministries.  This includes Churches, Mission Agencies, Christian Schools, Christian Camps/Retreats and all other Christian Ministries supported by the public.  So simply indicate in the "(a) N/A" column if the topic does not pertain to you... for example, under B> RECEIPTS, "Church Ushers and Counters" might not apply to your Ministry.
        We recommend that the Finance group leader thoroughly digest Internal Control matters as outlined within 0039. The Finance group leader would pass out the Flagable Topics List  below to all those in attendance.  Then this leader would explain each topic below, if necessary, and the group would agree on the "Red"  Flagable topics that need attention.

FLAGABLE TOPICS LIST (1):			(a) N/A	Green	Red
A> GENERAL INTERNAL CONTROL ITEMS:
	1-Embezzlement insurance (Bonding, etc) coverage		____	____	____
	2-Important records are in safe keeping		____	____	____
	3-Separation of finance duties to prevent
		staff member collusion	____	____	____
	4-Two people involved in Journal Entries		____	____	____
	5-Software "(c) Set in Concrete" issues		____	____	____
	6-Regularly compare actual to budget		____	____	____
	7-Merchandise Inventory matters		____	____	____
	8-Equipment accountability		____	____	____
	9-Other...plse indicate     __________________		____	____	____
B> RECEIPTS:
	1-Receipts not alone with people		____	____	____
		a) Event collections	____	____	____
		b) Church Ushers	____	____	____
		c) Church Counters	____	____	____
	2-Deposit intact (b)		____	____	____
	3-Receipts safe pending deposit		____	____	____
	4-Checks endorsed upon receipt		____	____	____
	5-Mail opening is secure		____	____	____
	6-Other.................................		____	____	____
C> AMOUNTS DUE THE MINISTRY:
	1-Matters concerning separation of duties		____	____	____
	2-Control & subsidiary Acct agreement		____	____	____
	3-Bal Due go out regularly		____	____	____
	4-Other.................................		____	____	____
D> DISBURSEMENTS-PAID OUTS:
	1-Limited Cash paid outs		____	____	____
	2-Someone else authorizes checks before
		Bookkeeper can write checks	____	____	____
	3-Bookkeeper does Not sign checks		____	____	____
	4-Original Inv/doc goes with check when
		signed and is voided	____	____	____
	5-Other.................................		____	____	____
E> BUYING - PURCHASING:
	1-In compliance w/authorized budget		____	____	____
	2-Advance approval of Volunteer buying		____	____	____
	3-Purchase Order or Plastic alternative		____	____	____
	4-Other.................................		____	____	____
(a) Seldom or Not Applicable (N/A)
(b) No payments made from Undeposited money
(c) Can not go back and change process

FINAL  THRUST

        Perhaps Church Associations should advocate and assist in their Churches taking such a test as this on a regular basis.
        Contact me at  Jim@bcidot.org  if you have any comments or questions. Let us know if there is any merit in a Ministry (anonymously, if desired) completing a form out on www.bcidot.org  that obtains the applicable "Flagable" test data and we assist the Ministry in evaluating "red flag" topics and correcting the agreed weaknesses.

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                               Other www.bcidot.org resources include the following:

	PUBLICATION DESCRIPTION	I. D.
1>	Assuror definition & matters	0063-07/all
2>	Camps-Conference cash handling	0042-02/all
3>	Church Counting	5001-77/chu
4>	Check Signing and Internal Controls	0066-02/all
5>	Grade Examples	0075-01/all
6>	Grade Examples-More	0128-77/all
7>	Grade Examples-Church	5128-77/chu
7a)	Improve Financial Admin	0916-03/fwi
8>	Insurance Exam	0073-02/all
9>	Internal Financial Controls-in detail	0039-01/all
10>	Integrity Pledge	0915-03/fwi
11>	Ministry Finance Evaluation	0025-01/hlp
12>	QB Internal Controls	0647-02/qbb
13>	QB Self Exams	0603-09/qbb
14>	Self Exams	0005-01/all
15>	Self Exams-Editorial	0901-03/fwi
16>	Ten Commandments at a Ministry	0032-01/all
17>	TRUISMs on this topic	0069-01/all

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   The bulk of this Publication originated in March 2002 and was . UPTD: May 03, 2008  

HOME  |  ABOUT  US   |    OUR PURPOSE   |   SITEMAP   |  COMPUTER FUND ACCTG  |  HELPS  |  GLOSSARY

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      (1) An Onliner Document, or WRIT  (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
        (2) WRIT formats include the perspective of   Jim@bcidot.org  via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and  FAQ, response to Frequently Asked Questions

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