Financial education

Understanding maker-checker

The single most effective control a group can adopt — one person records a transaction, a different person approves it. Why it works and where groups get it wrong.

KikumiKyo Editorial Team 6 min read Intermediate3 August 2026

What you'll learn

One person prepares a transaction, a different person approves it
It protects honest officers as much as it deters dishonest ones
The control fails the moment approval becomes automatic

Why one person handling money end to end always fails eventually

If a single officer can record a deposit, approve it, disburse a loan and adjust the record afterwards, then the group's protection rests entirely on that person's character.

That is a problem even when the person is entirely honest, for three reasons:

Errors go undetected. Nobody makes zero mistakes. If no one else looks, the mistakes stay.

The officer is unprotected. When money goes missing — even through simple error — the only person who touched it is the only possible suspect. There is no evidence available to clear them.

Temptation is created rather than resisted. Most fraud in small organisations is not planned by dishonest people. It is committed by ordinary people under sudden pressure who noticed that nobody was checking.

How it works in practice

Split every financial action into two roles:

The maker prepares the transaction: enters the deposit, captures the loan application, records the repayment, drafts the payment.

The checker reviews it against the evidence and approves or rejects it: does the receipt match, does the member exist, was this authorised, is the amount right?

Neither role can complete the transaction alone.

Where groups get it wrong

Rubber-stamp approval. The checker approves everything without looking. This is the most common failure by a wide margin, and it is worse than having no control at all — the group now believes it is protected when it is not.

The same two people always. If the maker and checker are related, share a household, or one is the other's supervisor, independence is theoretical.

Exempting the chairperson. Controls that apply to everyone except the most senior person protect the group against the people least able to do damage.

No record of who approved. If you cannot tell afterwards who checked a transaction, you have the inconvenience of the control without the accountability.

What is worth checking

You do not need two people on every trivial action. Concentrate the control where money can actually leave:

Cash and bank withdrawals

Loan approvals and disbursements

Writing off a debt

Adjusting or reversing a recorded transaction

Changing a member's balance

Payments to suppliers or officers

Reversals and adjustments deserve particular attention. A person who can quietly edit yesterday's entry can undo every other control you have.