Developing Internal Controls to Safeguard Church Resources

Churches operate on trust, faith, and generosity. Congregations give their time, talents, and financial support to help their ministries thrive. However, even in a faith-based environment, financial mismanagement—or worse, fraud—can happen. That’s why developing strong internal controls is essential to safeguard church resources.

While no one likes to think about the possibility of financial misconduct within their church, proper oversight protects both the ministry and those who serve within it.

Implementing internal controls doesn’t mean a lack of trust—it means being good stewards of the resources entrusted to the church.

Why Internal Controls Matter for Churches

Churches are unique organizations. Unlike businesses that operate with strict financial regulations, churches often rely on volunteers and part-time staff to manage donations, expenses, and financial reporting. Without clear policies in place, even well-meaning individuals can make errors, and unfortunately, bad actors may take advantage of weak systems.

Strong internal controls:

• Ensure donations are used as intended

• Prevent financial fraud and mismanagement

• Provide transparency and accountability

• Protect church leadership and staff from false accusations

• Strengthen donor confidence in church operations

  
  

Developing these controls isn’t about bureaucracy—it’s about reinforcing trust and ensuring the church’s mission can continue for years to come.

Key Internal Controls for Churches

1. Separate Financial Duties

One of the biggest risks for churches is having one person handle all financial tasks. When the same individual collects donations, records transactions, writes checks, and reconciles accounts, the opportunity for fraud increases significantly.

A better approach is to separate financial responsibilities:

• One person counts donations

• A different person deposits funds

• A third person maintains financial records

• A finance team or board reviews transactions and statements regularly

  
  

Even in small churches, involving multiple people in financial processes adds layers of accountability.

2. Implement Dual Controls for Cash Handling

Cash donations are common in churches, but they’re also easy to mishandle. To safeguard these funds:

• Always have at least two people present when counting cash

• Use a standardized counting sheet to document amounts received

• Deposit funds promptly—ideally the same day or the next business day

• Provide donors with receipts when possible

Establishing these procedures minimizes the risk of theft or accidental loss.

3. Regularly Review Financial Statements

A church’s leadership team should receive and review financial statements consistently. This includes income reports, expense tracking, and bank reconciliations. Regular reviews help catch errors early and ensure financial health.

Best practices include:

• Monthly financial reports reviewed by the church board or finance committee

• Annual independent audits or financial reviews

• Transparency with church members about overall finances

Keeping financial records organized and accessible builds trust with the congregation.

4. Require Multiple Approvals for Large Expenses

Churches should have a clear policy for approving significant expenses. A single person—whether a pastor, treasurer, or administrator—should not have unchecked authority over spending.

A few safeguards to implement:

• Require dual signatures for checks over a certain amount

• Have a documented approval process for major expenses

• Keep detailed records of purchases and receipts

This protects the church from unauthorized or impulsive spending.

5. Use a Secure System for Digital Giving

With more churches accepting online donations, ensuring secure digital transactions is critical. Choose a reputable giving platform with encryption and fraud protection. Also:

• Limit access to online donation records to authorized personnel

• Regularly monitor digital giving reports

• Educate church members about safe online giving practices

Protecting electronic donations ensures that the church’s financial integrity remains intact in an increasingly digital world.

6. Establish a Conflict-of-Interest Policy

Church board members, leaders, and staff should disclose any personal or business relationships that might create conflicts of interest. A clear policy ensures decisions are made in the best interest of the church, not individuals.

Guidelines should include:

• Requiring board members to abstain from votes where they have personal interests

• Disclosing financial relationships with vendors or contractors

• Documenting all financial decisions and agreements

Transparency in decision-making reinforces accountability and trust.

7. Educate Staff and Volunteers on Financial Policies

Even the best internal controls won’t work if no one understands them. Regular training helps church leaders, staff, and volunteers follow established financial procedures.

• Hold annual training sessions on financial policies

• Provide written guidelines for handling donations and expenses

• Encourage an open-door policy for financial questions or concerns

When everyone is on the same page, financial oversight becomes a shared responsibility.

Strengthening Stewardship for a Stronger Church

Developing and maintaining internal controls isn’t about distrust—it’s about stewardship. Churches thrive when they operate with integrity, accountability, and transparency. By implementing strong financial safeguards, church leaders can protect the resources entrusted to them and ensure they are used to further the mission of the church.

Taking the time to create and follow internal controls not only protects the church’s finances but also builds confidence among donors and members. When people trust how funds are managed, they are more likely to continue supporting the church’s mission—allowing ministries to grow and serve their communities for generations to come.

For churches looking to establish or strengthen their internal controls, professional guidance can be invaluable. Procuris Consulting specializes in helping churches and faith-based organizations develop financial policies that safeguard resources and promote financial health. Contact us today to learn how we can support your church’s financial stewardship.