Accounting

Week Two Learning Team Reading Responses

ACC/400

1 September 2014

eek Two Learning Team Reading Responses

Learning 1 The church's board of trustees has delegated responsibility for the financial management and audit of the financial records to the finance committee. This group prepares the annual budget and approves major disbursements but is not involved in collections or recordkeeping. No audit has been made in recent years because the same trusted employee has kept church records and served as financial secretary for 15 years. The church does not carry any fidelity insurance.

The primary weakness in regards to this finding is the fact that they do not have a second pair of eyes on the collections that are outside of collecting the funds. It is essential to keep others accountable for the money collected. The money collected should be cared for in a way that honors the church’s belief system.

One church policy that should be changed or even added is the need for the financial secretary position to be up for election after every two years and can be re-elected once. After the prior secretary’s final term the next secretary can come in and adjust systems as necessary. During the term period of the financial secretary, an external audit of internal controls should be emphasized by hiring an outside accounting firm to verify the internal controls are in fact being followed by the financial secretary and other related staff.

Learning 2. The collection at the weekly service is taken by a team of ushers who volunteer to serve for 1 month. The ushers take the collection plates to a basement office at the rear of the church. They hand their plates to the head usher and return to the church service. After all plates have been turned in, the head usher counts the cash received. The head usher then places the cash in the church safe along with a notation of the amount counted. The head usher volunteers to serve for 3 months.

The biggest...