Does your church need more oversight?
A November 18, 2013 article in Forbes suggested that houses of worship – institutions you would expect to be staffed by people of high moral character – can become havens of fraud and embezzlement.
Despite a lack of research on the topic and the contention that “as much as 95% of fraud within churches goes undetected or unreported,” ecclesiastical crime amounts are estimated to be $37 billion worldwide, with another $8 billion lost to mismanagement of funds.
Without much hard evidence are we to believe these figures? Perhaps not, but the Church and Synagogue Security News provides several pages of cases that have come to trial just in 2013.
Whether the figures offered in Forbes are accurate or not, embezzlement is clearly a significant problem in the religious world. During troubled economic times, even basically good people can fall prey to temptation. In addition, an atmosphere of trust and general lack of oversight can cause congregations to become victims of fraudsters and embezzlers.
As with any other business, internal control is important.
- Set a budget and question significantly different expenditures.
- Divide the duties! When one person orders supplies, another should approve the orders. When one writes checks, another should approve and sign.
- Review employee timecards and payroll regularly. Ensure payroll and FICA taxes are being paid.
- Compare the weekly counting committee reports with the bank deposit slips.
- Reconcile the bank account monthly.
- Insist on regular financial statements.
- Consider conducting an internal audit periodically.
If all this oversight represents simply too much to add to your already overloaded schedule, you may want to consider using an outside firm such as Online Stewardship for your accounting needs. An accounting management partner may seem like an unwelcome expense, but could save you potentially thousands of dollars and untold congregational trust.
Contact us if we can help you: Lynn@onlinestewardship.com or 904-398-4747.
