Nonprofit Accounts Payable and Disbursement Controls
Disbursement controls prevent fraud and ensure grant-funded expenses are properly authorized and coded. This monthly review of accounts payable controls ensures all payments are properly supported, approved, and recorded.
- Industry: Nonprofit
- Frequency: Monthly
- Estimated Time: 2-3 hours
- Role: Finance Manager / Controller
- Total Items: 27
Invoice Authorization and Approval
Verify invoice authorization controls.
- Purchase orders or written approvals obtained before purchases made?
- All payments supported by original invoices (not statements or copies)?
- Payments above threshold requiring dual approval processed with both approvals?
- All invoices approved by appropriate budget authority before payment?
- No employee approving own expense reimbursements?
Grant Expense Coding
Verify grant expense coding accuracy.
- All grant-funded expenses coded to correct grant and project code?
- Grant-funded expenses verified for allowability under specific grant terms?
- Expenses charged within grant period of performance?
- Costs shared across multiple grants allocated per approved methodology?
Vendor File Management
Maintain vendor files.
- New vendors approved by authorized person before payment?
- W-9 forms on file for all vendors receiving $600+ annually?
- Any vendors connected to board or staff disclosed as related parties?
- Vendor list periodically reviewed to deactivate former vendors?
Fraud Prevention Controls
Verify fraud prevention controls.
- Check signing segregated from accounts payable data entry?
- Bank reconciliation prepared by someone independent from disbursements?
- Cancelled checks or ACH confirmations reviewed by management?
- Electronic payment authorizations restricted to authorized staff only?
- Bank positive pay or other fraud detection service used?
Reconciliation and Reporting
Verify AP reconciliation.
- Accounts payable aging reviewed with no unexplained old items?
- Month-end AP close completed on schedule?
- Employee expense reports processed with original receipts?
- Upcoming payables reviewed for cash flow planning?
Year-End and 1099 Compliance
Prepare for year-end obligations.
- Vendors requiring 1099 reporting identified from current year payments?
- W-9 information complete for all 1099 vendors?
- 1099s filed with IRS and sent to vendors by January 31 deadline?
- Year-end AP accruals prepared for invoices received but not yet paid?
- AP documentation organized for annual audit support?
Related Nonprofit Checklists
- Nonprofit Payroll Processing and Compliance Review
- Nonprofit Restricted Fund Management and Release
- Nonprofit Social Enterprise and Earned Revenue Compliance
- Nonprofit Annual Audit Preparation and Readiness Checklist
- Nonprofit Volunteer Risk Management and Insurance Review
- Nonprofit Donor Acknowledgment and Gift Substantiation Audit
- Nonprofit Capital Campaign Management and Compliance
- Nonprofit Corporate Partnership and Sponsorship Management
Related Financial Management Checklists
- Nonprofit Grant Tracking and Fund Accounting Ledger Review - FREE Download
- Nonprofit Donor Receipt and Acknowledgment Compliance Audit - FREE Download
- Nonprofit Annual Audit Readiness Review - FREE Download
- Nonprofit Annual Budget Development and Board Oversight - FREE Download
- Nonprofit Financial Internal Controls Annual Review - FREE Download
- Nonprofit Gift Acceptance Policy Compliance Review - FREE Download
- Nonprofit Monthly Financial Reporting Package - FREE Download
- Nonprofit Financial Policy Annual Review and Update - FREE Download
- Nonprofit Investment and Endowment Management Review - FREE Download
- Nonprofit Payroll Processing and Compliance Review - FREE Download
Why Use This Nonprofit Accounts Payable and Disbursement Controls?
This nonprofit accounts payable and disbursement controls helps nonprofit teams maintain compliance and operational excellence. Designed for finance manager / controller professionals, this checklist covers 27 critical inspection points across 6 sections. Recommended frequency: monthly.
Frequently Asked Questions
What does the Nonprofit Accounts Payable and Disbursement Controls cover?
This checklist covers 27 inspection items across 6 sections: Invoice Authorization and Approval, Grant Expense Coding, Vendor File Management, Fraud Prevention Controls, Reconciliation and Reporting, Year-End and 1099 Compliance. It is designed for nonprofit operations and compliance.
How often should this checklist be completed?
This checklist should be completed monthly. Each completion takes approximately 2-3 hours.
Who should use this Nonprofit Accounts Payable and Disbursement Controls?
This checklist is designed for Finance Manager / Controller professionals in the nonprofit industry. It can be used for self-assessments, team audits, and regulatory compliance documentation.
Can I download this checklist as a PDF?
Yes, this checklist is available as a free PDF download. You can also use it digitally in the POPProbe mobile app for real-time data capture, photo documentation, and automatic reporting.