Internal Financials Controls - Self Testing 0039-77 ZZall

                                                                  - - - Rejoice in the Lord always ... again I say Rejoice !!! - - -

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

                   RE:  Financial Internal Controls Self Testing                                                                                                 Originated March 2002                                           


 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.   As you pursue this there seems to be the following elements of financial Internal controls:

>>  Separation of duties
>>  Appropriate authorization
>>  Complete documentation
>>  Reconciliation or an internal proofing process

        The suggested Ministry Finance Integrity Pledge within the above 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 financial 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 below 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 Here. 

       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.


                              
                   Other www.bcidot.org resources along these lines 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


   The bulk of this Publication originated in March 2002 and was UPTD: July 13, 2013  

ABOUT  US   |  OUR PURPOSE   |  TABLE OF CONTENTS   |  SEARCH  MATTERS  |  HELP DETAILS   |  FUND ACCTG VIA COMPUTERS   |  GLOSSARY