Why bother with internal controls? Stewardship

From a very basic perspective, the reason any governing board puts 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 are used as intended.  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 increases 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 spiritually sound.  

Developing appropriate internal controls, implementing sound board governance, drafting accurate job descriptions, and accurately reporting financial results are all aspects of good stewardship.

As an example, preparing regular reports of budget-to-actual expenses can create good stewardship.  Let’s say that money which should have already been spent for advertising or starting up a program has not been spent and there is a large, unexpected, favorable budget variance.  This should prompt a conversation in which the program manager would have to explain why a board-approved program that should have already started has not begun.  This conversation would make sure that departures from the board’s plans are addressed.

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