Segregation One of the most important measures your ministry can take to protect cash and YOU is implement segregation of duties, i.e. no single person should have control of the cash process. Ensure that the function of counting contributions and receipts is segregated from the depositing, general ledger and reconciliation functions. Accountability Accountability means that […]
Except in the rarest of cases, personnel costs are the single largest expenditure of a church. Because churches are in the “service industry”, it should come as no surprise that forty-five to fifty percent of the typical church budget will be dedicated to employee related costs. This highlights a basic principle in the behavior of […]
Any discussion of church tithes and offerings practices usually includes both a pat on the back and a criticism. First, in regard to the normal Sunday offerings I can say to most churches, “Way to go!” In fact, when I ask a client if they have taken any fraud prevention steps, the first thing usually […]
Until the 1960s, perhaps into the 1970s, churches were rather slow to pick up on new ideas, particularly in regard to technology. (If you have a hard time believing this, think back to the first time someone wanted to bring an electric guitar into your sanctuary!) But that is no longer the case, especially when […]
Establishing an organizational structure is the first step in combating fraud, however it is not enough. Key: In order to stay within reasonable boundaries, churches must take the time to carefully document their management structure and practices. Churches that fail to do this do so at great risk. A written organizational plan serves several purposes. […]
Let me be blunt. The fact that a church has never had an incident of fraud is due to one of two things: luck or planning. Needless to say, the odds of successfully avoiding fraud are much higher with the latter approach. If a church has been relying on the first approach and has never […]
“We have rotating count teams with clear rules that account for every penny we collect in offerings…” While this statement is not inaccurate, it is short-sighted. When churches think of fraud, Sunday offering protection is usually the first thing that comes to mind. And as a result, most churches do a very good job in […]
“Our bookkeeper has been a member and served our church for many years. We trust him/her completely…” Church’s Secretary accused of embezzling $1.5 million Former pastor guilty of stealing from church Church’s former secretary jailed on fraud charges Priests get jail for stealing from church Church secretary accused of stealing thousands Woman accused of stealing […]
“We require all checks to be signed by two officers of the church”. Dual controls, or separation of the accounting duties, are an important brick in the wall of fraud protection. Requiring dual signatures is often one of the ingredients in providing proper segregation of duties. But, if this practice is not combined with a […]
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, […]