Often in a small organization staff and Board volunteers work compatibly together, but have difficulty keeping track of who does what and when. There are some important policies to keep in place to make sure that all bases are covered, and nothing slips through the cracks.
- Set the control environment. Everyone – Board and staff – should know and follow the policies in place. This means the Executive Director also, who sets an example and doesn’t make exceptions for her/him self. Also remember that the bookkeeper should not be the person signing the checks.
- Define clearly who is responsible for what actions. For example, who approves travel expenses and checks the receipts? Who approves the time sheets? Who signs the checks and how many signatures are you requiring?
- Physical controls: Put all checks in a locked drawer. Computers should be password protected and locked to a desk.
- When cash is involved – such as a fundraiser or auction – have two people count the cash together.
- Reconciling the bank statement is crucial to prevent any funds from disappearing. If the organization has a very small staff it may be appropriate to have a Board member receive the unopened bank statement and look it over before giving it to the bookkeeper or responsible staff member.
All of these controls keep everyone safe and demonstrate the importance of high ethical standards and accountability. I am indebted to CPA Carl Ho, of Le, Ho & Company, for the wise counsel in these areas of good governance for your agency.