Thursday, November 26, 2020 00:47

Holy Embezzlement!


How to Keep Your Church Safe

Embezzlement is the most common crime committed in businesses and church (according to Raul Rivera).   And Church Mutual Insurance data indicate that 42% of the time it's the treasurer that's doing it. 

While church treasurers are elected and appointed because they are apparently trustworthy people–and no doubt most are–the best way to keep an honest person honest is to put safeguards in place to remove temptation and protect their reputations from unfair suspicion and accusation.

Most churches do not have adequate policies and procedures in place.  My conversations with church treasurers reveal that most of these dedicated servants know their reputations are at risk and they would welcome stricter policies and more oversight.  EXCEL's S.C.O.P.E. Stewardship Analysis can help you gain more confidence that you've got the right safeguards in place.

Church Mutual Insurance's Risk Reporter  points to these signs that accounting experts say to look for if you suspect embezzlement or fraud in your church.

  1. Excuses by the person in charge of the finances to avoid an audit.
  2. Failure to keep the check register with the check book.
  3. Failure to provide financial reports at meetings.
  4. Very protective of his/her job.

So what can be done to protect your church and make sure you're keeping what you're getting?

1.  Insist upon Separation of Duties.  The person in charge of the income must be different from the person in charge of paying the bills.  In other words, the Financial Secretary must not be the same person as the Treasurer.  And, the two must not be related by blood or marriage.  (By the way, in order to protect the reputation of your pastor from unfair accusations, never allow either of these key financial positions to be held by a person related to the pastor.)

2.  The Books Must Be Kept at the Church–not on a personal computer at home.  Someone other than the bookkeeper must have access codes so that a second independent, objective observer is never blocked from seeing what is being done.  In fact, there must be an assistant who is fully aware and fully trained in all the church bookkeeping policies and procedures.

3. Dual Control and Oversight Is Essential.  In many churches the Trustees are responsible for the financial matters of the church.  Whoever this team is, they must not only receive reports but review the books periodically.

4. Plan for periodic reviews and/or audits.  Ideally this should be done by a qualified person or group such as a CPA or accounting firm.  In many cases a full annual audit is not essential.  An accountant can advise on what standards are appropriate for you church.

ACT NOW to implement sound financial procedures in your church!  Tomorrow may be too late.  Jeffrey Hawkins, executive director of Christian Security Network says "internal crimes are the hardest to detect–probably only 30% of all of them are ever discovered or admitted."  He goes on to say that it is not unusual for financial fraud to go undetected for years.  It is most often discovered only when someone examines the books and finds irregularities.

EXCEL can help you.  Our S.C.O.P.E. stewardship analysis is one way to protect your church and make sure you're keeping everything you're getting.  The tithes and offerings of God's people demand your best stewardship and your faithful volunteers desire and deserve your protection.

© Linden Kirby, Excel Ministries, 2011. All rights reserved.

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