Posted on Wednesday, August 17, 2011
Online banking is easy and cheaper than traditional banking. Many organizations have already made the switch from paper bank statements to electronic. Some are also taking advantage of paying bills online through their bank’s website. However, if your organization is engaging in online banking, you need to have a written policy to make sure proper controls are in place.
One of the main controls that should be addressed in a written policy is who has access to the organization’s online banking. Only individuals approved by the board should have access to the account. Often times a bank will have various levels of authorization. Some users may be able to only view the current account balance, others may be only able to view transactions, while others may be able to view and print transactions and balances. The board should decide who needs to have access to what information and set up authorized users with the bank. In addition, the policy should define who is authorized to make payments online and how these payments will be approved. The policy should also state who is able to add vendors to the approved vendor list, as well as how these additional vendors are approved.
Other items that should be included in the policy are:
• Who can make and approve fund transfers
• Who can make and approve wire transfers
• Who can initiate and approve a stop payment
• Who is responsible for obtaining the monthly bank statement for the reconciliation
• Who is responsible for reviewing the monthly bank statement
• Who can open new accounts
• Who is authorized to add/delete users of the online system
• Password requirements – number of characters, required characters, and how often they should be changed
Posted by: Carrie Minnich, CPA
Posted in Mission Minded Nonprofits
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