Fraud Protection – Best Policies for Sharing Church Credit Cards

FROM http://weedsinthegarden.com/

Churches use credit cards regularly as a way to pay incidental bills required for operating the building and ministry. While the use of credit cards makes running a church easier in some ways, it also creates risks that must be managed. Prudent church financial management requires that employees’ credit card activities be carefully monitored to prevent fraudulent usage. Every church and ministry should devise a fraud prevention plan as an important risk management tool for fraud protection against credit card abuse.

The financial integrity of every church is only as good as its financial policies. Credit card fraud prevention policies should be documented and signed by every employee issued a church credit card. Without exception, receipts should be required to support all credit card purchases as a way to substantiate and reconcile expense reports and expenses.

5 Credit Card Fraud Prevention Policies
Below is a recommended list of best practices that have proven invaluable as credit card fraud prevention strategies.

1. Strict credit limits should be placed on credit cards to minimize exposure.
Requesting cards with low credit limits is one excellent way to limit exposure. If a $1000 limit is usually enough to cover regular monthly needs, then a church should favor a card with a $1000 credit limit instead of an open-ended limit or larger amount.

2. Be selective about which employees are given company credit cards.
An element of any viable fraud prevention plan is to exercise great caution when handing over credit cards. A common practice amongst for-profit companies is that an employee should be with the company for a certain period of time before they receive a company credit card. Churches should do the same, and should not feel badly about waiting to hand over a credit card to a new hire.

3. Review every receipt and reconcile it with the credit card statement monthly.
A basic reason fraud protection efforts works well is because employees realize that their receipts are being reviewed regularly to protect the financial integrity and functions of the church.

4. Reduce the need for credit cards.
One area of ministry where credit card usage is common is in transportation, like plane tickets to seminars, training conferences, etc. Technology advancements have proven to make travel less necessary. If possible, try to stick with webinars, Skype, videoconferencing and other tools which have replaced many travel requirements.

5. Reconcile credit card statements with expense reports.
Checking credit card statements against reports helps to catch any possibility of double-dipping, where employees both charge an expense and also request cash reimbursement. While this type of accounting scrutiny may sound extreme, it is necessary since this type of credit card abuse is a typical way that employees skim money from churches.

Maintain Financial Integrity with a Credit Card Fraud Prevention Plan
Due to the convenience and necessity of corporate credit card usage, it is here to stay. Consistent financial controls are required to track expenses and monitor church credit card usage as a way to limit the risk of becoming the victim of fraud. By employing a few simple policies, churches and ministries can rest assured that they are limiting the risk that credit cards pose. If you’d like to learn more about safe credit card policies for your church, contact Weeds in the Garden and we’ll help design a financial management plan that is tailored to your church’s needs.