Nobody wants to talk about this. Your treasurer is a friend. She’s been handling the books for four years. She volunteers her time, reconciles the accounts, deposits the checks, and presents the financial report at every meeting. Suggesting that she might steal from the club feels insulting. So nobody suggests it. Nobody asks to see the bank statements independently. Nobody questions why the checking account balance seems lower than expected. Nobody mentions that $800 in “miscellaneous expenses” line item that’s grown from $200 over the last two years.
Then one day someone does look. And the conversation that follows ruins friendships, splinters the board, and costs the organization thousands of dollars it’ll never recover.
This isn’t hypothetical. Blue Avocado reports that nonprofit embezzlement happens more frequently than most people assume, often in small organizations where trust replaces oversight. The Association of Certified Fraud Examiners’ Report to the Nations found that more than half of occupational fraud cases stem from either a lack of internal controls or overrides of existing controls. Small organizations with limited resources are disproportionately affected because they depend on a single person handling all the money.
Your club’s treasurer is probably honest. But “probably” isn’t a financial control. Simple safeguards protect both the organization’s money and the treasurer’s reputation. That second part matters more than you think.
Why Good People Steal (And Why That’s Not the Point)
Most embezzlement in small organizations doesn’t start with a plan. It starts with access and opportunity. The treasurer has sole control of the bank account. Nobody else sees the statements. A $50 withdrawal goes unnoticed. Then $100. Then $500. By the time someone looks, the total is in the thousands.
The person doing this might be struggling financially. They might tell themselves they’ll pay it back. They might genuinely intend to. But the money keeps flowing because nobody’s watching. Not because the person is a criminal. Because the system has no checks.
And that’s the point: the controls aren’t about suspecting your treasurer. They’re about building a system where theft is difficult regardless of who holds the role. When the system has checks built in, the treasurer is protected from suspicion, and the organization is protected from loss. Both sides benefit.
The Five Controls Every Club Needs
So what does a small volunteer club actually need? You don’t need an audit committee or a CPA. You need five simple practices that any volunteer organization can set up in an afternoon.
1. Two signers on every check
No single person should be able to write a check without another person’s awareness. Require two signatures on checks above a threshold (most clubs use $250 or $500). For smaller amounts, a single signer is fine, but the second person should review those transactions monthly.
For organizations that use online banking, the equivalent is requiring a second person to approve transfers above the threshold. Most bank accounts allow dual authorization on online payments. Set it up. It takes 20 minutes.
2. Someone besides the treasurer reviews the bank statement
Every month, the bank statement should go to someone who isn’t the treasurer. The president. The vice president. A designated board member. They don’t need to be a financial expert. They just need to look at the transactions and ask: do these make sense?
The National Council of Nonprofits recommends exactly this: make sure a second person, besides the person handling the money, sees the bank statements. That simple step deters most fraud before it starts.
This person doesn’t need to audit every receipt. They need to scan for things that look wrong. Cash withdrawals from an organization that doesn’t use cash. Payments to vendors nobody recognizes. Checks written to “cash” or to the treasurer personally. A quick 15-minute review each month catches most problems before they become crises.
3. Separate the money-handling from the record-keeping
In an ideal world, the person who deposits checks isn’t the same person who records the deposits. In a volunteer organization with five board members, that’s not always possible. But you can approximate it.
Have one person collect dues payments and another person record them. Or have the treasurer deposit checks but have a second person verify the deposits against the membership records. The goal is that no single person controls the entire financial chain from receipt to recording. When one person does everything, there’s nobody to notice if a $100 check arrives and only $80 gets deposited.
4. Annual financial review
Once a year, someone outside the regular financial process should review the books. Not a full audit (those cost thousands and are overkill for most clubs). A financial review. A board member who doesn’t normally handle money, or a member with accounting experience, sits down with the bank statements, the ledger, and the receipts, and makes sure they match.
If your annual budget is under $50,000, an internal review by a financially literate board member is sufficient. If it’s over $50,000, consider an independent accountant doing a compilation or review engagement. A full audit is typically reserved for budgets over $250,000.
The annual review isn’t about catching fraud in progress. It’s about creating the expectation that the books will be examined. That expectation alone deters misuse.
5. A written financial policy
Write down the rules. One page. This policy should cover:
Who can sign checks and above what amount a second signature is required. Who reviews the bank statement each month. What expenses the treasurer can approve independently and what requires board approval. How reimbursements work (receipts required, submitted within 30 days, approved by someone other than the person being reimbursed). How petty cash is handled (if your club uses it).
This document protects the treasurer as much as it protects the club. When the rules are written down, the treasurer can point to them and say “I followed the policy.” Without written rules, every financial decision is ad hoc and every expenditure is questionable after the fact.
The Awkward Conversation: How to Bring This Up
Proposing financial controls to a board that’s been operating on trust for a decade feels like accusing someone. Frame it as protection, not suspicion.
“I want to propose we adopt a simple financial policy. Not because anything’s wrong. Because as the organization grows, we should have basic protections in place. This protects the treasurer from unfounded accusations and protects the club’s money. It’s standard practice for any organization handling member dues.”
If the treasurer pushes back (“are you saying you don’t trust me?”), the answer is: “I trust you completely. That’s not what this is about. If something ever went wrong under anyone’s watch (yours, mine, the next treasurer’s), we’d want documentation that proves the process was followed. This protects you most of all.”
Most treasurers, once they understand the framing, welcome the controls. Being the only person who touches the money is stressful, especially in the treasurer’s first 90 days. Having a second pair of eyes is a relief, not an insult.
Red Flags to Watch For
Even without formal controls, certain patterns should trigger a closer look.
The treasurer who resists oversight. If someone gets defensive about sharing bank statements or letting another person review the finances, that’s a red flag. Not proof of anything. But worth investigating. Honest treasurers welcome transparency.
Financial reports that are always late or vague. “We’re doing fine” isn’t a financial report. If the treasurer can’t present a financial report members will actually read and produce a clear accounting of income and expenses at a board meeting, there might be a reason.
A growing “miscellaneous” or “other” line item. Small amounts buried in vague categories are the classic hiding spot. If miscellaneous expenses are climbing year over year without explanation, ask what’s in there. A reasonable treasurer can list every item.
Checks written to “cash.” Legitimate organizations rarely need to write checks to cash. If your bank statement shows them, ask why.
The treasurer who insists on handling everything alone. Healthy financial management welcomes help. “I’ll take care of it” for every financial task, month after month, with no willingness to delegate or share access, is concerning.
What to Do If You Suspect a Problem
If something looks off, don’t confront the treasurer privately. Don’t accuse anyone publicly. And don’t ignore it.
Talk to the board president or another officer you trust. Share what you’ve noticed. Stick to facts: “The miscellaneous line item has grown from $200 to $800 over two years and I can’t find documentation for the increase.” Don’t speculate about intent.
The board should then request a financial review. This can be framed as routine: “The board has decided to do an annual financial review starting this year.” If the review reveals problems, the board has options: requesting repayment, filing a police report, or both. If the review reveals everything is fine, the organization now has clean records and a new annual practice.
One thing to remember: the goal is protecting the organization, not punishing a person. Many embezzlement situations in small organizations are resolved privately with repayment arrangements. That’s a board decision, and it depends on the circumstances.
The Cheapest Insurance You’ll Ever Get
Financial controls are free. They require no software, no consultant, no budget line item. A second signer on the bank account, a monthly statement review, and a one-page written policy: these cost nothing but an afternoon of setup.
What they prevent can cost thousands. The median loss from nonprofit fraud, according to the Association of Certified Fraud Examiners, runs into tens of thousands of dollars. That’s years of dues. That’s the new community center fund. That’s the scholarship account.
More than the money, fraud destroys trust. The community that learns its treasurer stole $15,000 doesn’t just lose $15,000. It loses members. It loses volunteers. It loses the belief that the organization is worth caring about. Rebuilding that trust takes years, if it happens at all.
Set up the controls now, while everything is fine. They’re easier to set up when nobody’s suspected, nobody’s defensive, and the conversation is about good governance rather than bad behavior. Your treasurer will thank you. Your members will trust you. And your club’s money will be where it’s supposed to be.
Financial transparency builds trust. Somiti keeps a complete record of every payment, every expense, and every member transaction, so your financial data is always accessible and never depends on one person’s laptop.