Banking Accounts
Banking accounts should be kept to the minimum number necessary to accomplish the business of the parish. If the parish has a school, a single checking account should be used to handle the operations for both the parish and the school. Most accounting systems used today by the parishes within the Archdiocese of Kansas City in Kansas are capable of operating with a single checking account for all parish related activity. Parish related activity is easily tracked in the general ledger of the accounting software system. For ease of accountability Parish Administration should consider maintaining bank accounts (operating, organizational, etc.) at one financial institution. Higher combined account balances may enable the parish to negotiate better rates and terms.
All parish related checking accounts should be registered in the name of the parish and should use the parish tax ID number. No accounts shall be registered in the name of an individual whether clergy, religious or lay. Additionally, no individual’s social security number shall be used for parish related accounts.
Signature Card Compliance
Without exception, the Pastor should be noted on the signature card of all banking accounts operating on behalf of the parish. Depending on the size of the parish, any or all of the Pastor/Administrator, Parish Administrator, Business Manager, Associate Pastor or Finance Council member may be signatories on the account. Under no circumstances should the parish bookkeeper or person responsible for the financial recordkeeping be allowed to be on the signature card. Additionally, any and all individuals that leave the parish should immediately be removed from the signature card upon their departure.
Bank Statement Review
Proper bank statement review is the single most effective way to safeguard the assets within the parish community. The Archdiocese of Kansas City in Kansas requires that all parish related banking account statements be mailed to the parish office for review by the Pastor or his designee prior to distribution to the various auxiliary groups and/or school. A copy should be kept for parish records and the original statement forwarded to the applicable organization leader. Bank statement reviews should include a detailed analysis that includes checking for proper signatures, verifying payee’s validity and evaluating any transfers. If bank statements do not include photocopies of deposits and paid checks, parish administration should negotiate with the bank to ascertain that these items are included in the future.
Bank Reconciliation Review
All parish related banking accounts should be reconciled on a monthly basis and reviewed by an individual independent of the handling and recording of cash for the applicable organization. Bank reconciliations for the general parish banking account and any other parish accounts that accounting is handled by the parish bookkeeper, should be reviewed by a member of the Finance Council. Reconciled balances should be tied to the reported book balance (balance sheet) and ending bank statement balance should be confirmed. Additionally, bank reconciliations should be printed and retained in accordance with the Archdiocese Record Retention Policy.
Parish Organization Bank Accounts
As a convenience to the association, the Pastor may allow a parish organization to open a bank account using the parish name. Organizations may have banking accounts only with the Pastor’s permission and the Pastor must be noted on the signature card.
Organizational banking accounts and financial records are the property of the parish. Organizations may not deny the Pastor access to financial records, bank statements or any other requested information. Organizations that refuse to comply with Archdiocesan guidelines will not be considered to be a parish related organization. Use of the parish sales tax exemption, parish tax ID number and any benefit from the parish’s not-for-profit status will be denied. Additionally, evidence of adequate liability insurance coverage will be required of the organization for use of the parish facilities.
FDIC Insurance
The Archdiocese of Kansas City in Kansas requires all parishes to bank with an institution that is affiliated with the Federal Deposit Insurance Corporation (FDIC).
Closing of Bank Accounts
Inactive bank accounts should be closed to prevent unauthorized banking on behalf of the parish. Parish Administration should also consider closing or merging minimally active banking accounts. When closing a bank account all left over check inventory should be shredded to prevent fraudulent use of the remaining checks.
Verification of Parish Accounts
Bank confirmation testing can assist the Pastor in confirming all existing bank accounts operating on behalf of the parish and help in recognizing any account that may not have been previously known to the Pastor. Parish administration is encouraged to send formal bank confirmations on an annual basis to all banks they are currently doing business with, as well as other local banks in the surrounding area. Bank confirmations will confirm existing banking accounts and identify any accounts that may not be known to the Pastor or parish staff. Click here for a sample bank confirmation.