I was saddened to read about a neighborhood church, where my kids used to attend youth events, being yet another victim of church embezzlement.
\nAll you have to do is go to your search bar and type in \u2018church embezzlement\u2019 and you will find many headlines:<\/p>\n
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- Woman pleads guilty to embezzling $300 from Church;<\/li>\n
- Manlius church treasurer\u2019s husband arraigned on embezzlement charges;<\/li>\n
- Treasurer convicted and sentenced for embezzling over $110,000 from church bank accounts in California;<\/li>\n
- Church bookkeeper gets 3 years for embezzlement;<\/li>\n
- Largest South Korean church\u2019s embezzlement scandal just got worse;<\/li>\n<\/ul>\n<\/blockquote>\n
And the list goes on and on. According to Brotherhood Mutual,
\n\u201cChurch crime continues to grow \u2013 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.\u201d With about 80 percent of all cases of church fraud being unreported, this is staggering!<\/p>\nSo what the heck is going on? Are churches really this mis-managed?
\nThe 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\u2019s what we do.<\/p>\nThe 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.<\/p>\n
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.<\/p>\n
1. Policy and Procedures<\/h3>\n
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 \u2013 just to name a few. The more eyes on the books, the more likely it will be for someone to notice irregularities.<\/p>\n
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2. Training<\/h3>\n
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.<\/p>\n
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3. Audits<\/h3>\n
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.<\/p>\n
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4. Rotation<\/h3>\n
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.<\/p>\n
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5. Safes<\/h3>\n
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\u2019t 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.<\/p>\n
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6. Two-Person Rule<\/h3>\n
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.<\/p>\n
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7. Background\/Credit Checks<\/h3>\n