Lesson 1 – Overview


Internal controls are financial management practices used to prevent misuse and misappropriation of assets, such as theft or embezzlement. Typically, internal controls are described in written policies that describe the procedures that the nonprofit follows as well as who is responsible.

Internal Controls are about trust building. The goal is to create “checks and balances” on staff and board members or outside vendors to reduce the risk of misappropriation of funds/assets. Once trust is lost then it is expensive and time-consuming to rebuild it among donors, employees and the community.