Protecting People from Themselves

I find it interesting how many organizations are hesitant to institute checks and balances for fear of offending someone. They think that the person will think that the organization doesn’t trust them. Maybe the person will think that but it’s your responsibility to put safeguards in place, not only to protect the organization but because it is kinder to the individual in the long run for two main reasons:
1. We are all only human. If cash regularly passes through our hands and there aren’t any checks and balances, how long before we need $5 for lunch one day and decide to borrow the money. We might pay it back, we might forget. Time passes and later we need more money. If you are reading this and thinking—that would never be me—remember that many people who ended up taking large sums of money from their company said the same thing, with equal conviction, at one time.
2. We need to protect others from false accusations. You never know when the political climate of your organization can change. You may be doing well financially now, but in three years if finances change, people sometimes starting looking for somewhere to place blame. If someone falsely accuses another of misappropriating funds, you want to be able to say—“no, that’s not possible because of…(name safeguard that is in place)

General rule of thumb—make sure 2 to 3 people are involved in every financial transaction. Small organization? Make sure items go before the Board. Involve the Board in approving bills, signing checks, reviewing the monthly bank reconciliation, and reviewing monthly financial reports.