Sample reading from Step Up to the Next Level:
A Guide for Pregnancy Centers to Improve Their Internal Operations and Prepare for an Audit
Here is a sample from chapter 1 of the text:
Why bother with good procedures?
We want to avoid any criticism of the way we administer this liberal gift.
For we are taking pains to do what is right,
not only in the eyes of the Lord
but also in the eyes of men. 2 Corinthians 8:20, 21.
Why do pregnancy centers need to move forward? Why can we not stay where we are? The book discusses three compelling reasons. Here is the discussion on one of those reasons.
Good internal controls are the right thing to do.
Accountability—For Bible-believing Christians, the idea of being accountable to others is not new. The idea of being accountable to the elders or church council for your program carries over directly to a parachurch ministry. It is very easy to see how accountability enters into a nonprofit’s responsibility to the government in terms of complying with regulatory reporting and compliance issues. When a donor specifies a contribution should be used for a particular program, it is obvious the ministry should spend the money for the specified program. Accountability shows in a nonprofit organization’s responsibility to the public for reporting what money was received and how it was spent.
Stewardship–At a most basic level, the reason the board of directors puts internal controls in place is so the board can be sure that the programs and activities they wish to implement are actually implemented. Put a different way, this means the board needs to make sure that resources entrusted to them by the public are used as intended. In the Christian community, we have a framework for this concept. It is called stewardship–our responsibility to use prudently the resources God has entrusted to our care. Putting good procedures and controls in place will increase the likelihood that resources will be used responsibly. It is not showing a lack of trust in people to expect good stewardship of resources. On the contrary, it is soundly spiritual to expect good stewardship from others. Developing appropriate internal controls, implementing sound board governance, and accurately reporting financial results are all aspects of good stewardship.
Love your neighbor–One of the key concepts for internal control is called segregation of duties. This is the process of taking incompatible tasks and spreading them among several people. The basic concept can be described as splitting up the work so that one person cannot do something improper and also hide the impropriety. In other words, no one person should be in a position to commit a fraud and then hide it.
Internal controls are often described from the perspective of the organization. Let us look at the concept of internal control from the perspective of a staff person. When your bookkeeper realizes he or she could do something wrong, could hide it because there are missing internal controls, could keep it hidden, and as a result, could get away with it, there is constant temptation present. This would be a terrible temptation, especially on a day when a person is weak or under spiritual attack. Since we are Christians, we know from personal experience that every person is a sinner. One could argue it is irresponsible for an organization to put temptation in the face of an employee day in and day out. It is just wrong to put someone into the position of having to resist obvious temptation daily based on sheer willpower. The ministry would show a much higher love of neighbor (in this case, your dedicated bookkeeper) by putting controls in place so the bookkeeper either could not perpetrate or could not hide something improper. This would go a long way in removing the temptation. Proper levels of procedures and internal controls show love for your neighbor.
This page is extracted and adapted from Step Up to the Next Level – A Guide for Pregnancy Resource Centers to Improve their Internal Operations and Get Ready for an Audit. Copyright 2006 James L. Ulvog. Used by permission.
Scripture is quoted from New International Version Copyright 1973, 1978, 1984 by International Bible Society. Used by permission of Zondervan Publishing House.