P.392 Byb8-4
Indicate the weaknesses in internal accounting control over the handling of the collections.
Not having fidelity insurance seems to be the least of the church's concerns as it doesn't seem to have a very good system of control in place to begin with. Depending on the size of the church and the collections, it may not seem financially sound to purchase it. There are many other weaknesses in the way collections are handled. There is no independent internal verification- especially since they haven't performed an audit in years. There is not enough segregation of duties because the financial secretary handles the deposits, record keeping, and the bank reconciliation. There is no oversight of the ushers or the head usher, and no one to verify his count because they do not have any documentation procedures in place. Since the ushers are all volunteers, there is no type of background checks on any of them.
List the improvements in internal control procedures that you plan to make at the next meeting of the audit team for
1 - The ushers will no longer take collections to the basement, but instead should deposit them in a collections box up front, reducing the likelihood of theft and reducing the need for background checks.
2 - The head usher will count the contents of the collections box with a staff member present. They will document the total on a multi-part slip, which they must both initial. The first copy will go in the safe with the collections, and the second copy will be filed for the finance committee.
3 - The financial secretary will document the amount withheld from the deposit and that will go into a recorded petty cash fund. The amount of the deposit plus the amount of the petty cash fund should always equal the amount on the original collections document.
4 - The finance committee will conduct at least one audit a year and one additional surprise audit every 3 years.
What church policies should be changed to improve internal control?
If they wanted
Not having fidelity insurance seems to be the least of the church's concerns as it doesn't seem to have a very good system of control in place to begin with. Depending on the size of the church and the collections, it may not seem financially sound to purchase it. There are many other weaknesses in the way collections are handled. There is no independent internal verification- especially since they haven't performed an audit in years. There is not enough segregation of duties because the financial secretary handles the deposits, record keeping, and the bank reconciliation. There is no oversight of the ushers or the head usher, and no one to verify his count because they do not have any documentation procedures in place. Since the ushers are all volunteers, there is no type of background checks on any of them.
List the improvements in internal control procedures that you plan to make at the next meeting of the audit team for
1 - The ushers will no longer take collections to the basement, but instead should deposit them in a collections box up front, reducing the likelihood of theft and reducing the need for background checks.
2 - The head usher will count the contents of the collections box with a staff member present. They will document the total on a multi-part slip, which they must both initial. The first copy will go in the safe with the collections, and the second copy will be filed for the finance committee.
3 - The financial secretary will document the amount withheld from the deposit and that will go into a recorded petty cash fund. The amount of the deposit plus the amount of the petty cash fund should always equal the amount on the original collections document.
4 - The finance committee will conduct at least one audit a year and one additional surprise audit every 3 years.
What church policies should be changed to improve internal control?
If they wanted