Q&A: Should There Be a Limit to the Number of Church Bank Accounts?

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: Should there be a limit to the number of bank accounts a church has?

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?

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 issues:

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The more accounts created, the greater the likelihood of having funds erroneously deposited or withdrawn from the wrong accounts;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; and
The more accounts created, the more checkbooks created, and the harder it will be to track and to secure blank checks.

CPA and senior editorial advisor Vonna Laue 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.