Church Embezzlement (and six ways to guard against it

FROM: http://www.worshipfacilities.com/go.php/editorial/20887

By Mark Brooks -

The numbers just did not add up. A few years back I was working with a church that was struggling financially, yet their giving was strong. They shouldn't have been struggling to make budget. I remember telling the pastor that I thought he should get an audit. He dismissed my advice as being unnecessary. Recently this church made headlines when it was revealed that the financial secretary was embezzling funds from the church. Suddenly it all made sense—including why she always made getting their data difficult. Thieves never like working in the light.

Recent headlines throughout the country are reporting similar incidents. It should be noted that the press loves a bad story and they will always highlight any shortcomings in the church. Thus, while incidents like the one I encountered are rare, they nonetheless do occur.

A scandal involving the finances of the church results in more than bad press, it discourages giving. One of the top reasons stated in surveys of why people give to an institution is that they trust that institution with their money. If you lose that trust, it is difficult and sometimes impossible to ever win it back. A wise church takes steps ahead of time to avoid this kind of fiasco.

Here are some basic steps your church can take to avoid the above examples.

1.) First, establish good accounting systems. There are scores of good church accounting software that is affordable and effective in tracking your giving and spending.

2.) Set up internal accountability. You should have a lay team of qualified people serving as your finance team. This team should have full access to all records. Any hired staff member that handles money should regularly report to this lay team.

3.) Always have more than one person handling the collected offering and counting what comes in. The more eyes on the prize the less likely someone is tempted to have itching fingers.

4.) Require more than one signature on all checks. It might be a hassle, but two signatures help keep everyone honest, especially if one of the signatures is a non-staff person.

5.) Yearly do a simple audit using an outside agency. A simple review is not that expensive, but having a yearly review might help you avoid anyone dipping their hand into the kitty.

6.) Every three to five years do an extensive audit. You can never be too careful. While more costly, an extensive review will help your members have the utmost confidence in your finances. I might add that I would do this every time a financial secretary leaves their position.

There is no guarantee that any of the above will keep you from a highly motivated, dishonest person—but it will help make it more difficult. Getting people to give to a church is hard enough as it is without a scandal; take steps now to avoid any hint of impropriety.