Internal Controls for Small Organizations
Internal controls are a must for an organization to maintain its integrity and safeguard its assets. The more people involved in the process, the less likely it is that an error or misappropriation will occur. Here are some ways to implement general internal controls in your small nonprofit’s accounting process:
•Use only pre-numbered checks.
•Use accounting software to print checks if at all possible.
•Keep all unused checks in a locked cabinet or closet.
•Limit the number of people with access to the checks.
•Limit check signers to trustees and management.
•Pay only from invoices. Do not process statements from vendors.
•NEVER pay a vendor without a valid invoice or contract.
•Mark invoices “paid” to avoid duplicate payments.
•Someone other than the person writing the check should review the documentation and sign the check.
•Require two signatures for amounts above a set threshold.
•Someone other than the person writing and mailing the checks should receive the unopened bank statement and review the contents before it is reconciled.