Internal Controls
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XACC/280
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<Instructor>

Internal Controls (a) Indicate the weaknesses in internal accounting control over the handling of collections.
There are many weaknesses in the current process in which the church collects, documents, and secures the weekly collections. The first problem is that the finance committee, who prepares the annual budget and approves major disbursements, are not involved with the collection and record keeping process. How can a group which has that much power not be involved in the collection and security of such an important asset of the church which is the cash? Next, no internal audit of the finances has been done in 15 years because they trust the financial secretary who has been in the position for 15 years. Regardless of how long a person has been in charge of the collections, bad things happen to good people all of the time. And if this trusted person did mishandle the church funds, the church has no fidelity insurance to protect them from any losses.
There are also problems with the collection process itself. Once collected, the ushers take it to the basement of the church where it is left with one person, the head usher, who counts the money alone, documents the amount, and places the collection in the safe. The head usher position is a three month volunteer position. The church is putting too much trust in these individuals. They are counting the money alone and they access to the safe. This means that four people per year know how to access the safe which is not very secure. Another problem is that parishioners are asked to make checks payable to cash which means anyone who holds that check can cash it.
I also see weaknesses with the process where it involves the financial secretary. She is currently withholding $150 to $200 dollars in cash from the weekly collections. How is