Ledger of Financial Records

From the time they were born, George and I raised our daughters in the church. We wanted to raise them to have hearts open to all people. We struggled though, with how to raise them to seek the best in all people and be safe for we knew there were people who would use their trust to harm them. We found a children’s book that helped us have “the talk.” In the Berenstain Bear book, one of the parents showed the children a lovely apple. From the outside, it looked delicious. When they cut it open, though, part of it was rotten. They told the children you can’t always tell from the outside what is on the inside, so you have to practice good safety practices with everyone.

As church people, we want to offer people Christ’s grace-filled love. We believe in second chances for a cornerstone of our theology is the process for second chances: confession, repentance, forgiveness and new life. Like our children though, we have to balance having open hearts to all people and maintaining safe practices to protect the church from people who aren’t what they seem. Jesus warned his disciples as he sent them out to do his work,

Look, I’m sending you as sheep among wolves. Therefore, be wise as snakes and innocent as doves. (Matthew 10:16, Common English Bible)

He too recognized the need for a balance between being grace-filled and being safe in a fallen world.

I have been stunned to learn how often churches are the victims of fraud. According to Church Mutual Insurance, one third of all congregations will experience a theft each year. One third each year! Most people who steal from the church believe they have no chance of being caught and they are right, eighty-seven percent of people who commit fraud have never been charged. They are in the church an average of eight years before they commit fraud. Fraud detectives told me that one hundred percent of people who steal are “the nicest people who have eaten at the tables of other congregants and been a friend to them.” You just can’t tell by looking from the outside what is inside the heart of someone. The triangle that these detectives see over and over again is

  1. Opportunity (lax financial controls, lots of trust and little oversight),
  2. Pressure (from things like unpaid bills, addictions, unexpected illness and the bills from it),
  3. Rationalization (“I will pay it back.” “They don’t pay me very much, so I am owed this.”)

Preventing fraud in the church is a stewardship issue. The average fraud is over $120,000, that is a lot of money that was donated for ministry going to thievery. So what are some best practices to protect the gifts that are given to the church?

  1. The number one deterrent is the fear of getting caught. Acknowledging that fraud occurs and that the church will be taking steps to safeguard their finances is a good start. Then do things that limit opportunity (lead them not into temptation).
  2. Use two counters with the offering from plate to the bank. Change the counting teams regularly and mix up who is on the team.
  3. Add cameras in the counting room and wherever there is lots of cash.
  4. Make sure there is a separation of duties–check signers should be different from the people who balance the bank statement. Have duplicate bank statements and credit card statements go to a council member. (Credit card statements should be checked carefully. They are the biggest area of fraud.)
  5. Have regular reviews that also look at financial practices on all accounts (including church preschools and groups.)
  6. Require criminal and credit background checks on staff and volunteers who handle money.
  7. Require two signers on checks especially if it’s a large amount.
  8. Never allow church records to be stored on a personal computer or kept in a church member’s home. Use a cloud-based back-up so several people can review the books at any time.

If fraud is suspected, call the District Superintendent first and an attorney second. Do not discuss it publicly without advice from the attorney. Suspected thieves can sue if they are accused publicly. Prosecute when possible!

Church Mutual has an excellent Fraud Prevention webinar on this topic at https://www.churchmutual.com/dsp/dsp_srVideo.cfm?id=3137. I highly recommend that all pastors, business managers, and finance committees watch this webinar. The Conference Council on Finance and Administration has developed a Financial Best Practices Checklist. A Pastor’s Checklist for Protection of Church Finances is also available. These resources will help us to protect our church’s financial resources and be good stewards of the gifts entrusted to our churches.

Grace and peace,

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Author: Nancy Cushman

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