In another post (See Lame Excuse #1), I use the story of Judas stealing from the disciples’ money bag to illustrate that fraud can take place in any church. This week I found another Biblical example of this truth. Luke, in Acts Chapter 5, recounts the sad story of Ananias and Sapphira.
In the story, this couple sells a piece of property and promises the church (and the Holy Spirit!) that the proceeds would be given to the congregation. As it turns out, the couple comes up with a scheme to withhold some of the funds while making it appear they had given the whole amount to the church. When confronted, both Ananias and Sapphira cover themselves by lying.
This week, in my routine “fraud news search”, I found a story with some similar characteristics.
Former Church Treasurer Charged…
Did you notice that this treasurer essentially did the same two things Ananias and Sapphira did. She stole money from the church and then lied about it by “doctoring” the books.
What can a church do to avoid such a fate? Here are two observations:
The fact that the fraud was not discovered until a new treasurer took over implies that no one, other than the treasurer, ever looked at the accounting records. The church was violating the basic accounting philosophy of adequate segregation of duties. Lack of involvement by others made it easy for the treasurer to steal, and then doctor the records to cover her tracks. Something as simple as having someone other than the treasurer reconcile the bank account monthly might have been enough to prevent the thefts.
Second, I have never been convinced that debit cards are all that useful in the church world. Sure they are efficient, but a debit card (and his close relative, the credit card) can completely circumvent the best bill approval and payment systems. If a church insists that it must have cards, by all means adopt a credit card use policy to govern their use.
Because of our involvement in fraud prevention we make it a point to keep up with the latest news by periodically searching the web for news stories. It seems like the pace of fraud occurrence is quickening.
Here are two recent stories of church embezzlement:
- Church employee charged with embezzlement
- Firefighter and church deacon accused of embezzlement
PSK is not involved in any of these situations so I have no idea about anyone’s guilt, innocence or the ultimate outcome of the cases. But, I am sure of one thing; no church or ministry wants to make these types of headlines.
To avoid this kind of publicity we have been urging, almost pleading with churches to take this situation seriously. A “clear and present danger” exists and every church should immediately perform an analysis of their current management structures to determine their vulnerabilities to fraud.
The most common reason given why churches do not take fraud or embezzlement seriously is the almost universal belief that such things cannot take place in a “Christian” environment. Nothing could be further from the truth. In the Gospel of John the Apostle makes the following observation about one of his associates in ministry: “He [Judas Iscariot] did not say this because he cared about the poor but because he was a thief; as keeper of the money bag, he used to help himself to what was put into it.” (John 12:6) If it can happen in Jesus’ immediate circle, it can happen in any church, anywhere, and any time. But, if that is not enough to convince you, we will provide updated reports of the unfortunate churches who are hit by fraud.
It starts at the top…
If only this church had:
Developed a strong organizational structure insuring what is commonly called good “tone at the top.” In the Alaskan dog races a common phrase is “if the lead dog won’t go, the sled won’t go.” Except in extremely small churches, the pastor should never be involved in the handling of funds.