Fiscal control stopgaps: what NOT to do
Every nonprofit organization, no matter the size or complexity, should have a board-approved fiscal controls policy outlining the policies and procedures an organization follows for approving financial decisions and tracking revenue and expenses. Adopting and following such a policy helps the organization not only to combat fraud, but also to improve financial planning and streamline financial operations.
As with any other internal policy, ArtsPool can help you draft a fiscal controls policy based on our template and guide you through the board approval process. But the board review process can take a while. In the meantime, here are some common fiscal control errors. If you are doing any of these things, please stop now and reach out to your Member Liaison so they can help you start drafting a fiscal controls policy.
- Signing blank checks or other payment/transfer instruments
- Engaging in transactions, including bank deposits, credit card purchases, petty cash, and other expenditures, without retaining appropriate documentation
- Allowing staff other than board-approved check signers to approve payments
- Allowing access to check stock to staff other than those authorized to prepare checks
- Storing check stock and organization credit cards in an insecure location
- Operating without a board-approved budget for the current fiscal year
- Reporting actuals against budget to your board less than annually (preferably quarterly)
- Opening bank accounts, credit cards, or investments, or changing signing authority, without the board's formal approval
- Storing passwords and other credentials outside of secure systems (preferably as provided by ArtsPool)
- Storing donors' or customers' credit card information outside of PCI-compliant systems
- Allowing organization staff, including senior management, to make changes to the books (only ArtsPool should do this)