Opening a Bank Account and Establishing Check Signing Procedures
Opening a bank account and establishing check signing procedures can be a very involved and risky venture. For my corporation, because it is so small, and most donations are gifts-in kind or money. I plan to be the only person handling money in my organization with a second check signer as a system of checks and balances. In many not-for-profits, the executive committee can all sign checks and all checks require at least two signatures. This policy is usually put into place so that at least two people can always be held accountable for a check that is written and deposited by a payee. There have been reported cases where individuals within a not-for-profit organization have handed out blank checks, resulting in inappropriate usage of funds.
In a specific investigation I read, a man named Bertie Ahern was being interrogated for signing blank checks, which were later found to be used for shirts in Paris, expensive meals and parties. Ahern said “signing blank checks was a normal procedure because nobody ever suspected Haughey was using the Fianna Failleader’s account for anything other than designated purpose” (John, n.d.). Signing blank checks is definitely not a routine for best practices and should never be permitted within a not-for-profit corporation.
Sooner than later,
The Tiny Professional