Multiple Bank Accounts

by Ed
(Texas)

I was just told that it is illegal for a church to have multiple bank accounts i.e. General, Savings, Special, Mens, Ladies, etc. I also was told that you cannot make change for someone from the offering.

I have never heard of this but laws are constantly changing. We wanted to open a Special bank account to keep monies from projects separate from our General Fund.

Thanks

Comments for Multiple Bank Accounts

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Multiple Church Bank Accounts
by: Anonymous

Many churches have multiple bank accounts. There's no prohibition against it.

It's a good policy to never make change from the collection. It disrupts the chain of custody of donated funds, and in some cases can abet tax fraud. For example, if a church member claims to have an urgent need for cash and gives the church a $100 check, after the church provides them the cash, they'll still end up with a cancelled check that can be used to substantiate a charitable deduction on their tax return.
IRS rule
by: Anonymous

Is there a rule by feds about oversight of Sunday school and other checking accts
Multiple Bank Accounts
by: Anonymous in NC

I have not read were it is illegal to have multiple bank accounts; a church where I served as Admin Assistant had two checking accounts, one for General Funds and another account for Sundry Funds to help with the same objective you are referring to. However, having too many checking accounts could be a nightmare for an Admin. Assistant or person(s)responsible for reconciling all the checking accounts.

You may want to looking at a better accounting system to help with the problem you are having. You could set up a cash account for General Funds and a cash account for Sundry Funds or specific "other" funds and income accounts for all those fund sources. The money would be accounted for separately in your general ledger, but you could still put all the deposited funds in one checking account. Hope this makes sense to you; I am sure it will to your trained bookkeeper or accountant.
multi bank accounts
by: Sandi

make sure you do it right...

the first place to research is the IRS:
http://www.irs.gov/pub/irs-pdf/p1828.pdf

infomation on church sub groups: http://www.irs.gov/pub/irs-pdf/p4573.pdf

link to the GAAP (this is hard to read but it has good information):
http://www.fasab.gov/accounting-standards/authoritative-source-of-gaap/

I haven't heard that it is illegal for multiple bank accounts .. can you post where this information came from?

It is not good policy to make change or use the donations until they have been counted and added to the books, tracking of all income/donations is required by the IRS and just good accounting....

hope this helps,
Prayers

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