Q&A: Limit the Number of Church Bank Accounts

Question: Our church changes deacons and session members every three years and this question seems to come up every time there is a change in elders. About nine years ago, we had five or six checking accounts throughout the church; the church's name was attached to the accounts for these various groups. Our finance team decided to close all of these checking accounts and instead run all funds through the treasurer's office. As a result, we are constantly asked by deacons, choir leaders, and multiple groups within the church to give them their checkbooks back. What are the pros and cons of allowing groups to open up checking accounts with the church's name attached to them?

Answer: It's not surprising to hear you're getting these types of requests. At first glance, it seems the most convenient to let each group have an account so that they can tap into their budgeted money when needed. But such an approach isn't advisable. The conventional wisdom in the church finance world is for churches to limit the number of bank accounts the church uses. Ideally, a church should use only one or two. The logic is generally based upon the following five tips:

  • The more accounts created, the easier it is for someone to disguise and/or mask fraudulent activity;
  • The more accounts created, the more administrative work required to monitor, oversee, and reconcile accounts on an ongoing basis;
  • The more accounts created, the greater the likelihood of having funds erroneously deposited or withdrawn from the wrong accounts;
  • The more accounts created, the more chances created for outsiders to steal account numbers that can be used for electronic fraud;
  • The more accounts created, the more checkbooks created, and the harder it will be to track and to secure blank checks.

Vonna Laue, an editorial advisor for Christianity Today International's Church Management Team and co-author of the Essential Guide to Church Finances, also advises churches to regularly check with their banking institutions to make sure groups haven't quietly opened accounts on their own. "Oftentimes, a missions committee or ministry group has obtained the tax identification number for the church and opened an account. The church is ultimately responsible for those funds and ought to make sure that none exist—or if they do, to make sure that controls are in place to oversee the activity," Laue says.

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Displaying 1–2 of 2 comments

John W. Whorton

November 29, 2011  4:20pm

I would add one more item to Matt Branaugh's list. With all funds in one bank account, you have more efficient us of the money. My church maintains a bank certificate of deposit for excess funds, which we could not do if each "fund" had it's own separate bank account.Additionally, if one "fund" runs short of money on a short-term basis, it does not create a difficulty. You would not have this flexibility with many separate accounts.

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November 23, 2011  12:33pm

I would also add that every group having their own account allows the left hand to keep what it is doing from the right hand. Secrecy in church finances is never a good thing. Openness and accountability are preferred. I've seen committees and church groups with their own accounts not tied to a budget. Their rationale is that we raise the moneys in these accounts ourselves therefore we should be accountable to no one for what we spend. That situation raises several flags for me.

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