Part 7 of our ongoing Fraud in the Church series. PSK in cooperation with the National Association of Church Business Administration (NACBA) conducted a survey to determine the extent to which churches are attempting to address the problem of church fraud. We asked them to respond to this statement:
Our church follows written guidelines in administering benevolence fund activity.
Many churches establish benevolence funds to assist needy persons. This is a normal and expected function of any church. However, if assistance programs are not monitored closely the benevolence fund can become a target of theft. Benevolence funds are favorite targets for several reasons:
- There is no business cycle, making baseline analysis almost impossible
- Checks are written to a variety of individuals and vendors not closely related to the church, making it easy to slip one more in the pile
- To protect the confidentiality of recipients, some churches operate separate bank accounts that only one person has the right to see!
35% of our respondents do not follow written guidelines in administering assistance programs.
It is extremely important that the Church establish clear policies on its benevolence activities. Such policies should include but not be limited to:
- what funds will be accepted
- who will administer the funds
- who will receive the funds, and
- for what purposes the funds will be spent.
Best practices also dictate that a documented beneficiary application and approval process be followed when awarding assistance.