Cash receipts and disbursements present challenges for churches

Posted: 2/29/08

Cash receipts and disbursements
present challenges for churches

By Ken Camp

Managing Editor

DALLAS—Handling cash presents some of the greatest challenges—and potential problems—for churches in terms of finances, said Roger Hall, retired chief financial officer and treasurer for the Baptist General Convention of Texas.

“The biggest risk involves cash before it gets on the books,” said Hall, who works part-time as business administrator for First Baptist Church in Waxahachie and serves as a consultant with several nonprofit ministries.

He suggests when it comes to handling cash receipts, a good starting place for churches is to remember there’s safety in numbers. Two or more people should monitor offerings when they are taken from the church’s sanctuary or Sunday school classes to the church office, two or more should count the cash, and two or more should take locked moneybags to the bank for deposit, he said.

“Have the counting committee members bonded as money handlers,” Hall suggested, adding that check signers and other financial personnel also should be bonded.

When it comes to disbursements, Hall offered several recommendations:

• Use only church-approved bank accounts.

• Have all checks signed by two approved parties, and designate back-up signers for times when the principle signers are unavailable.

• Use only pre-numbered checks.

• Do not sign blank checks or make checks payable to cash.

• Have approved invoices or documents available to review at the time checks are signed.

• Reconcile bank accounts monthly. That task should be performed by a person other than the individual who prepares the checks.

• Make sure checks are made out to approved budget or designated accounts from which authorized funds are available.

Hall recommends a division of labor regarding a church’s legal and financial matters. Trustees should sign legal documents on behalf of the church after congregational approval. The treasurer should provide financial reports to the church business meetings, work with the financial secretary on financial matters and oversee the conducting of an independent audit.

The financial secretary’s handling of money should be limited, Hall said.

Ideally, he sees the financial secretary’s job carrying a six-fold responsibility:

• Maintain accounting records.

• Prepare checks for signature by authorized individuals.

• Prepare financial statements.

• Maintain individual contribution records.

• Handle payroll and re-ports.

• Oversee petty cash.

As a church considers its policies about handling finances, Hall said, it should keep in mind a clear sense of purpose—“to see that resources are handled properly, ensure accountability and keep the church family informed.”