All registered NGOs in most countries can operate bank accounts. Bank accounts are also required to receive funds mobilized by NGOs besides using them for administrative and project-based expenses. A procedure on how to operate these bank accounts would be relevant as part of the NGO financial management policy. So what goes into this kind of procedure? Below are the details for bank account management and it can be integrated into the policy manual:
Operating Bank Accounts
Bank Account
Bank account for the project funds shall be opened only in a nationally recognized bank or any other bank authorized by the central bank of the country. Necessary authorization to open any bank account or alter its manner of operation would need to be got in writing from the necessary authority. A separate bank account can be opened depending upon the project need.
Authorized Signatories
- Every check/instrument is signed by at least two signatories
- A staff that has access to bank account and cash account is not entitled to be an authorized signatory.
Authority to Sign
The authority to sign should lie with selected executive members of society. The bank is authorized to undertake any written instructions, signed by two of the signatories, for transacting any financial business from time to time.
Closing of Bank Accounts
Any bank account not required to be operated must be closed immediately. The Finance/Accounts person has to take the matter with the Competent Authority and procure in writing the obtaining necessary resolution. When it is decided to close a bank account, the following actions should be completed:
- Transfer balance in the account (leaving the minimum amount required) to the other bank account.
- Surrender all the check leaves to the bank under a receipt.
- After receipt of the resolution, deliver it to the bank under receipt and transfer the balance to another account.
- Confirm closure of the bank account and transfer of balance to the competent.