Financial controls are the written rules and procedures for financial management that all organisations should have.
Financial controls should cover, for example, who can sign cheques, who maintains the cash books, and how petty cash is administered.
Some of these rules will be laid down by the constitution (or, in the case of registered companies, memoranda and articles of association) and others may simply be unwritten understandings, or ways of working traditionally adopted by the management committee or staff of the organisation.
As a minimum your organisation should have the following internal financial controls in place:
- Cheque payments should require two signatures (or equivalent authorisation controls if making automated payment)
- If possible, two people should always open the post and count cash receipts
- Petty cash should be managed on an ‘imprest system’ (see Section 7 on Petty Cash)
- Bank accounts should only be opened by the management committee
- Personnel records should be kept by someone other than the person who pays salaries
- A fixed assets register should be maintained and (if applicable) a list of investments.
This page is a summary of information contained in the full online toolkit.
