Separate Bank Accounts for Ministry Departments

Q: Many of our ministry departments, such as the Women’s department, Men’s department, and Youth department have separate bank accounts. The financial activity of each department is managed solely by the department leader, while the church’s General Fund activity is overseen by the Treasurer and board. Is this a good practice?

A: This is a common question for many churches, and often mirrors the following scenario: The church board has access to monthly financial reports for the main operations of the church, but the financial activities of several subcommittees or departments are not reviewed by the church board on a regular basis. Each of these ministries have their own bank account and operate independently. The financial activity of these ministries aren’t accountable to the church board on a regular basis, but only on an annual basis.

The risk to the church is that one person has complete control of the department’s finances with little oversight or accountability. The risk for department leaders, is that without accountability to another, those leaders are vulnerable to temptation or accusations of misconduct.

While this may be common for churches, the lack of transparency does present some challenges. Even though there may not be any indication of impropriety, I would encourage more transparency and accountability over these departments’ activity.

Because the financial activity of these ministries are a subset of the main operations of the church, the board has a responsibility to ensure that all funds are accountable and used appropriately. This means the board must have access to and monitor the financial activity of all church ministries. To allow more transparency and accountability of department activity, I would suggest the following:

If Maintaining Separate Accounts

If the board desires to allow individual ministries to maintain separate checking accounts, they must ensure the following:

• Leadership should review how funds are received and disbursed. Procedures should be added to ensure two people are involved in handling and disbursing funds. No one person should have complete access to ministry funds.
• Financial reports should be presented to the board on a monthly basis, including a detailed listing of all transactions. Bank statements and credit card statements should be available, if requested.

If Combining All Accounts

• If leadership desires additional accountability and transparency, the board should consider absorbing all department activity into the main financial operations of the church, so that all financial activity is subject to the same review and approval process.