An area often overlooked at ministries is the review and approval of senior leaders’ expenses. While we tend to trust our leaders’ integrity, small mistakes or outright abuse can lead to questions and mistrust by donors and diminish the reputation of your ministry.
While it is more common for staff within the organization to have their supervisor review and approve expenses, this is not often true of the most senior leader. Who should review his or her expenses? The business administrator, CFO, or accountant? Or should it be the chair of the board or corporate treasurer?
Here are some steps you can take to be sure your organization has sound practices to protect both your senior leader and your ministry.
- Make sure your organization has a clear set of guidelines that specify appropriate expenses for your most senior leader. These guidelines should clearly distinguish between organizational and personal expenses, even addressing expenses that are appropriate for spouses. This is an important document for your board chair and senior leader to discuss, then present to your entire board for approval. These guidelines help avoid misunderstandings and prevent reimbursement of questionable expenses.
- As a part of the annual budgeting process, be sure the board is aware of and approves the expense budget for your senior leader. This should be in addition to the overall annual budget of the organization.
- Create a process for the board chair or corporate treasurer to review and approve all expenses incurred by the senior leader each month. This process should be easy and consistent, and it should enable the board chair or corporate treasurer to immediately address any questions.
Taking these steps will help to ensure that your board has taken adequate responsibility and oversight to protect the organization and senior leader from scandal.