Sammy - Your NonProfit Advocate.
First let’s start by finding out what are internal controls, and why they are so important? At the very least they are established protocols that help bring order and cohesiveness to your small business or organization. Good controls can go a step further to help protect against error, fraud, and theft.
An organization must to establish good controls to ensure that board members and officers understand their financial responsibilities, that assets are managed properly, and the purpose of the organization is being carried out.
There are some very easy things that can be done in this area to help protect your organization.
That is all well and good but how does a small organization do all of this? First, take a hard look at your organization. Do you write checks? Where are the checks stored? They should be locked when they are not being used. Do you have account numbers, passwords, etc.? How are they stored? How easily would it be for someone to get to? Start there and make small changes to protect the physical assets of the organization.
I have heard too many stories of trusted employees and advisors writing themselves a large check and cashing it. This could be a big enough impact to shut down the organization. Let’s be sure this does not happen in your organization.