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    Review of Accounting Procedures at Local Church

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    You have been asked by the board of trustees of a local church to review its accounting procedures. As a part of this review, you have prepared the following comments relating to the collections made at weekly services and record-keeping for members' contributions:

    1. The church's board of trustees has delegated responsibility for financial management and audit of the financial records to the finance committee. This group prepares the annual budget and approves major disbursements but is not involved in collections or record-keeping. No audit has been considered necessary in recent years because the same trusted employee has kept church records and served as financial secretary for 15 years.

    2. The collection at the weekly service is taken by a team of ushers. The head usher counts the collection in the church following each service. He then places the collection and a notation of the amount counted in the church safe. Next morning the financial secretary opens the safe and counts the collection again. She withholds about $100 to meet cash expenditures during the coming week and deposits the remainder of the collection intact. To facilitate the deposit, members who contribute by check are asked to draw their checks to "cash."

    Describe the weaknesses and recommend improvements in procedures for collections made at weekly services. Organize your answer using the following format.

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    Solution Summary

    The solution reviews the accounting process of a church, including a description of the weaknesses and recommendations for improvements to their system of collection and auditing.