Most of our church's Sunday school classes and groups have their own bank accounts, but use the church's federal identification number for those accounts. The finance committee has no oversight of these accounts, and no control over the funds or how they're spent. Is this appropriate?
It seems convenient to let each group have an account so that each can tap into its 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- The more accounts created, the greater the likelihood of having funds erroneously deposited or withdrawn from the wrong accounts;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.