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Internal Control Procedures

Internal Control Procedures. How to Implement Controls – Part 1. Well-defined organizational chart, showing clear lines of responsibility Separation of Duties Custodianship, recordkeeping, authorization

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Internal Control Procedures

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  1. Internal Control Procedures

  2. How to Implement Controls – Part 1 • Well-defined organizational chart, showing clear lines of responsibility • Separation of Duties • Custodianship, recordkeeping, authorization • For example: bookkeeping, signing checks, reconciling the bank account and cancelled checks, recording and depositing receipts (offertory collections and other receipts) • Safeguard accounting records • Secure financial documents • Checkbook, deposit slips, etc • Use of check request form for all “material” purchases • Establish an internal audit committee

  3. How to Implement Controls – Part 2 • Rigorous hiring practices (screening employees) • Fidelity bonds for those who handle cash • Encourage (mandate??) use of envelopes for contributions • Encourage (mandate) checks, not cash, for contributions (or bank transfers) • Have at least two people involved in the offertory counting

  4. 50 Internal Control Practices • General Internal Controls • Includes cash receipts controls • Cash Disbursement Controls • Reconciliation Practices • Other Assets

  5. IC Best PracticesEvangelical Lutheran Church • Receipts (Sunday and special offerings); • Bank account reconciliation process; • Authorized bank signers • Capital expenditures; • Disbursements; • Congregational loans; • Payroll; • Taxes; • Data processing/data security/Personal Identity Information (PII); • Asset classification; • Purchasing; • Records retention; • Regulator and legal compliance; • Code of Ethics; • Endowments; • Travel expenses; • The budgeting process

  6. Fin. Mgt. and Control ManualDiocese of Des Moines • Bank Accounts • Other Parish Organizations • Internet Banking • Cash Disbursements • Management of Mass Collections • Other Cash Receipts • Socially Responsible Investments

  7. Diocese of Bridgeport • Controls over Offertory Collection • Review and Tests of Parish Financial Controls and Accounting Practices • Annual budget preparation and monitor actual results • Revenues and collections (again!!) • Purchasing and disbursements • Payroll and related transactions • Bank and investment account reconciliations • Report results of review and tests

  8. Internal Controls Questionnaire • IC Questionnaire from Episcopal Diocese of Montana • IC Checklist from the Tennessee Baptist Convention

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