I was saddened to read about a neighborhood church, where my kids used to attend youth events, being yet another victim of church embezzlement.
All you have to do is go to your search bar and type in ‘church embezzlement’ and you will find many headlines:

10 Ways to Stop Church Embezzlement in its Tracks

  • Woman pleads guilty to embezzling $300 from Church;
  • Manlius church treasurer’s husband arraigned on embezzlement charges;
  • Treasurer convicted and sentenced for embezzling over $110,000 from church bank accounts in California;
  • Church bookkeeper gets 3 years for embezzlement;
  • Largest South Korean church’s embezzlement scandal just got worse;

And the list goes on and on. According to Brotherhood Mutual,
“Church crime continues to grow – estimated at $100 million each day. Increasing at an annual rate of nearly six percent, researchers expect church financial fraud to reach the $60 billion mark by 2025.” With about 80 percent of all cases of church fraud being unreported, this is staggering!

So what the heck is going on? Are churches really this mis-managed?
The concept of a trusted bookkeeper, treasurer or money counter stealing from the church is simply counter intuitive for those of us who embrace Christian principles. We are the church. We trust people, we love people and we give people the benefit-of-the-doubt. That’s what we do.

The reality check, for those in church leadership, is the realization that easy access, no controls and personal need (or justification) are all stepping stones to church fraud. We all want to believe that the sweet lady who diligently keeps the books would never steal, but the reality is if the conditions are right, embezzlement is inevitable and once it begins it becomes a slippery slope.

It starts small, maybe one of the counters slips a ten dollar bill into his pocket, no one finds out and then it becomes a little easier to muster up the nerve to do it again. No one finds out so they try again. These examples are merely holes in the armor and demonstrate a lack of management and control.

1. Policy and Procedures

The first step in any effort of control is to write policies and procedures. Spend some time thinking through how your organization would like to control the handling of, and access to, church funds. There should be clearly stated policies for things like cash handling, two-person accountability, rotation of counters and a commitment to auditing – just to name a few. The more eyes on the books, the more likely it will be for someone to notice irregularities.


2. Training

Employees and volunteers who help with counting the offering, or assisting in the church office, should be trained at least annually on the policies and procedures that relate to church funds. Included in this training should be the measures that the ministry takes to safeguard its financial resources. This simple step will make would be perpetrators think twice because they will see that the organization is diligent in its efforts to protect its resources.


3. Audits

Church audits are expensive, there is no question, but it is critical that the church takes the steps to conduct thorough church audits on a regular basis. These audits should be done by an independent outside auditor. This is another step that alerts someone that the books will be reviewed and that misappropriation of funds will be discovered.


4. Rotation

Volunteers and employees who help with counting the offering should be rotated on a regular basis. No one should stay in the role indefinitely and the use of multiple, unrelated people will make it more difficult to skim dollars from the offering.


5. Safes

Cash and checks should be kept securely in a locked safe until it is delivered to the bank. Get a safe with a drop slot so that it doesn’t require someone to open it to make a deposit into it. Have a policy that the safe is only opened by two people and the combination is limited to a few people who do not have a key to the room the safe is kept. These simple security measures will help to control your risk.


6. Two-Person Rule

The cash handling policy should have a strict two person rule, stating that there will always be a minimum of two people when cash is handled, counted or transported. The two people should not be related and should not have personal financial issues.


7. Background/Credit Checks

In today’s society it is only wisdom to perform a background check on all church employees and volunteers but people who have access to church funds should also be subjected to a credit check. While this practice may seem a little invasive, this simple step can provide information that can ultimately protect the church. As with all sensitive information, strict confidentiality practices should be used.


8. Watch for Warning Signs

There are many signs you can watch for but a few to think about are:
Only one person has access to offering, cash, checks and check log.
Person with access doesn’t take vacations and guards against someone else doing their job.

  • Person with access is living beyond their means.
  • Person with access has personal financial issues.
  • It is difficult to get financial summary from responsible person.
  • There is inadequate supervision of person(s) handling cash.


9. Act on Suspicion

If you have a gut feeling, take the time to investigate and act on your instincts. Solicit help from a trained fraud examiner to help you sort through your suspicions.


10. Supervision/Management

Church leaders are responsible for managing operational practices within the church. Whether that oversight is of employees or volunteers, it is critical to have good supervision of those who deal with church funds. Our natural leadership tendency is to empower people with the freedom to work independently, but when it comes to church finances, that leadership principle should be thrown out the window. Enforce the practice of keeping church financial records in the church office. Make your presence known, ask questions and insist on timely financial reporting. Management and supervision is a crucial aspect of financial controls.

Churches could not exist without the generous support of its members. Those who embrace the Christian principle of giving, trust that church leadership will be good stewards of their money. These countless cases of church fraud and embezzlement speak to the critical need for church boards and leadership to wake up, do their job and safeguard God’s money. I challenge you today to call a meeting and discuss this critical issue with your leadership team.


What practices does your church use to safeguard against embezzlement?

About The Author

Patricia Lotich

Patricia Lotich is the founder of Smart Church Management, a site devoted to providing free articles, tools and resources for those managing a church operation. Patricia has ten years of Business Administration and Church Operations experience and has a driving passion to help churches fulfill their call by managing the resources God has given them – people, time and money. Follow Patricia on Twitter and Facebook

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2 Responses

  1. Denise

    Great article! I am happy to report that my church does have these practices in place AND we only allow Board of Trustees to count the Sunday offerings (on a rotation basis). Additionally, no staff of the church, including our Controller is allow to sign checks. We only have 4 Board of Trustees that are authorized to sign any checks. That is a best practice First Unity has had in place for many, many years. I shared this article with my Controller and Board Treasurer!

  2. John Jones

    This is a really good article and I enjoyed reading it. This year we hired a CPA not because of suspicion but for the sake of wisdom and good business practice. It is the first time the church has done so since starting in 1866! Praise the Lord, there were no irregularities. If you are in the Chattanooga/Cleveland TN area I recommend Lawhorn & Company International http://www.lawhorncompany.com. A Christian business who specialize in Church/Non-profit organizations. -Providence Baptist Church.