Nonprofit organizations work hard to steward their resources wisely, and thoughtful internal controls can help strengthen that effort. While financial limitations can make it challenging to implement every ideal control, there are some best practices while holding fundraising activities to strengthen controls—especially when handling cash, checks, and ticket sales. The following procedures are designed to empower nonprofit teams, support accurate recordkeeping, and promote smooth, secure, and successful fundraising events.
Cash Handling Procedures
- Always have at least two unrelated individuals present when counting cash. Each individual should complete a Cash Count Sheet independently, and totals should agree. All count sheets should be signed and retained.
- Count all cash and checks immediately following the event and prepare the bank deposit promptly. For safety purposes, two individuals should deliver deposits together when possible.
- If funds cannot be counted immediately, arrangements should be made in advance with the treasurer or finance officer. Funds should never be taken home and must be secured in a safe or locked container until counted.
- Segregate duties by separating the responsibilities for collecting funds, preparing deposits, recording transactions, and reconciling bank statements. No one individual should control more than one of these functions.
- Endorse all checks immediately upon receipt.
- Prepare a separate adding machine or calculator tape for checks and retain it with deposit documentation.
- Prepare an additional tape summarizing total cash, currency, and checks and attach it to the deposit slip.
- Record all deposits promptly in the organization’s accounting system and retain supporting documentation.
Ticket Sales Procedures
- When selling raffle or event tickets, record the starting and ending number of each ticket roll issued. Use tickets of the same color or design, when possible, to simplify control and verification.
- When tickets are distributed to volunteers for sale, document the quantity and ticket number range assigned. Upon return, reconcile tickets sold, tickets returned, and cash remitted.
- Communicate in advance that ticket counts and reconciliations will occur when funds and tickets are turned in.
- Confirm compliance with applicable state laws, including requirements that raffle tickets be sold at uniform prices.
- Ensure at least two individuals count ticket stubs and related funds.
- Treat unsold tickets as monetary assets. Secure them and include them in reconciliation procedures.
Drawing Procedures
- Prior to the drawing, prepare a list of all valid ticket number ranges issued.
- When a ticket is drawn, verify the ticket number against the valid ticket list before awarding a prize.
- Retain the winning ticket stub as part of the event documentation.
Accounting and Documentation
- Maintain complete records of all fundraising events, including cash count sheets, deposit records, ticket logs, and related approvals.
- Reconcile fundraising proceeds to the general ledger and bank statements in a timely manner.
- Review fundraising results with the treasurer or finance committee to ensure completeness and accuracy.
Implementing these best accounting practices strengthens internal controls, protects organizational assets, and supports accurate financial reporting for nonprofit fundraising activities.
Please contact the Not-for-Profit Niche team at Gilliam Bell Moser LLP for further guidance.
