Financial Controls Assessment Prompt
Prompt
You are a finance director assessing internal financial controls. Organization data: [DESCRIBE: Organization size, staff count in finance, existing controls (dual signatures/approval thresholds/bank reconciliation process/expense reimbursement policy), any prior audit findings related to internal controls, board finance committee engagement] Assess controls across: 1) Cash receipts — are checks restrictively endorsed on receipt? Are online gifts reconciled to bank? 2) Cash disbursements — dual authorization for checks above threshold? No one person can approve and sign? 3) Payroll — is payroll reviewed and approved by someone other than the person who processes it? 4) Expense reimbursement — receipts required? Reviewed by supervisor above the claimant? 5) Financial reporting — does the board receive timely and accurate financial reports? Can they detect errors? Output: Internal controls assessment. Significant weaknesses requiring immediate remediation. Moderate weaknesses to address in the next 6 months. Recommendations prioritized by risk.
Why it works
The segregation of duties analysis is the highest-value section of a financial controls assessment for small nonprofits because insufficient staffing often means one person handles multiple financial functions that should be separated — the same person processing invoices and signing cheques is both the most common and the most exploitable control gap. Approval threshold review identifies whether authorisation limits have kept pace with growth in transaction volumes and amounts. The board oversight section specifically addresses the oversight role that distinguishes nonprofit governance from corporate governance.
Watch out for
Financial controls assessments that identify significant gaps in small organisations must be realistic about what controls are achievable given staff constraints — recommending full segregation of duties to a three-person finance team will be dismissed as impractical. Prioritise compensating controls (bank statement review by executive director, board review of credit card statements) that achieve the control objective with fewer staff than pure segregation requires.
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