Single-entry accounting and General Ledger for a small church

I am an auditor for our small church, and I uncovered questionable spending practices by the now former Treasurer who is not forthcoming with records which were done online.

We can access a limited time period of single-entry accounting, but we are blocked from the past 3 years because earlier records were done in different software.

He won't respond to requests for the username & admin pswd. Shouldn't I be going after a General Ledger too?

He seems to have moved Designated Funds to Operational with out a valid reason but I feel like I'm chasing rabbit trails.

We are hiring a non-profit tax atty to advise and to remedy potential IRS problems before they happen. Due to late withholding filings (on FT's part)we are red-flagged.

The church has already given the former treasurer a demand letter for all records. We have pieces of information but not everything. Would a General Ledger normally always be used, or do some churches use simple single-entry in place of it?

I am not a trained bookkeeper...obviously

Answer

It is very wise on your part to hire a nonprofit tax attorney now. He should be able to advise you on several of your issues.

With single entry bookkeeping you do not actually keep a general ledger and journals like you do with double entry bookkeeping. You essentially just use a list with a column for expenses and another for income.

See this basic accounting page for more on the difference between the 2 bookkeeping systems.

Did anyone else enter the church’s financial transactions or was it all done all by one person? If someone else entered the transactions while he was on vacation or something similar…would they have a username and password? Note: If a staff member never goes on vacation or allows anyone else to enter the church’s transaction...it should throw up a red flag.

I know this is kind of like shutting the barn door after the horse has already got out...but for other readers here...never...never let just one person have access to the church’s financial transactions.

See this page for internal controls you can implement in your church.

You might try contacting the online company and explain the situation and see if you can get the username and password reset.

Hope this helps,