Segregation of Duties, part 6

Part 6 of our series on Segregation of Duties. In our recent Fraud Survey, we asked churches to respond to this statement:

“We present a list of authorized check signers to the leadership team/elders, etc. for review at least annually.”

Survey results – Approximately 55% of respondents reported reviewing their bank accounts and related signature information at least annually.

Dormant Bank Accounts

I would imagine if we had sent a question asking if they knew why this annual review was important the result would probably be close to zero!  This question was lifted right out of our firm’s audit procedures.  We ask this question each year and are often asked why this is important.

Here are two good reasons:

Poor management of check signing authority can result in a once-authorized check signer to continue to be one, even though they may have not been a church member/employee for years.

More importantly, poor management of signatures indicates poor management of bank accounts.  Occasionally churches will even forget about a few bank accounts that are infrequently used.  Unfortunately, fraudsters do not forget once they have found an untended, forgotten about account.

KEY: DORMANT BANK ACCOUNTS can be a useful tool to a thief allowing him to store stolen funds and later transferring them to personal accounts with little chance of detection.

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