AND let’s add another thousand
You’re a small church of 65 people. Your members care for each other and are sacrificial givers. And those who went before were good stewards, so the church isn’t hurting for money. But STILL – the church secretary really isn’t supposed to walk off with nearly $200,000…
The Case
Amy Krohmer, 43, was the church secretary at West End Methodist Church in Roanoke, Virginia. The church had 65 members, and she took care of their finances from 2009 to 2018. They didn’t have enough people to provide proper supervision for her. Things got a bit creative.
Ms. Krohmer made unauthorized credit card purchases to the tune of $118,733. She wrote checks to herself, too. When she did, she marked them “void” in the register. Or she disguised them as legitimate purchases. She also often added $1000 or $2000 to her paychecks. Since her salary was $823, this was a nice boost…
Over the course of seven years, investigators identified $195,186 of losses. But bank only had records back seven years. As a result, they couldn’t reconstruct what she might have done during her first three years there. The total was likely to have been more.
And it would have been helpful had the church run a criminal background check on her. It seems she was also up on similar charges the year she began working for them.
She faces 20 years in prison and restitution. link
Analysis
Many churches often have trouble providing proper supervision for those doing the finances. And in a small church you know and trust everyone. It’s a situation ripe for embezzlement. She had the opportunity. All it took was her telling herself she would pay it back.
A simple review of the bank statement would have caught her the first month. But she was the only one who saw it. For nine years.
The first rule in financial procedures is to separate jobs. Let one person work with the money. Let him or her throw it up in the air and watch it flutter down – no problem! Let someone keep the books – they can record expenses to their heart’s content. But don’t let them near the money. Do NOT let this be the same person! (Oh, and for the guy playing with the money – have someone else there to watch him.)
Here, the secretary had a church credit card, did payroll, and wrote the checks. She also kept the books and processed the statements. She was able to mask her thefts, and she shredded the statements. It took nine years for someone to notice some discrepancies.
The church also failed to check her references or do a criminal background check. She had been charged with similar felonies the year she started for them. The charges were dropped or reduced in a plea bargain. But information should have been available had they looked.
How To Prevent This At Your Church
Be sure that the bookkeeper keeps the books but does not touch the money in any form. He or she can certainly LOOK at the money – this is necessary to get the job done. Banks offer “view only,” “read only” access, where transactions and amounts are visible. But with this access, the person cannot TAKE the money. Also, be sure that the bookkeeper doesn’t have a church debit or credit card. And
he or she should not be able to write checks.
Explore online bookkeeping software options: your bookkeeper could certainly PREPARE checks. But another person should be the one to authorize or sign the checks. It’s best if the checks were printed by someone else, too. That way the bookkeeper doesn’t even have access to the blank checks.
And check references and do a criminal background check on your finance people. If your state permits doing so, run a credit check, too: severe financial stress is a red flag for possible fraud.
Best Choice?
Consider our church audit service – it’s easy and surprisingly affordable. We help find holes in financial procedures and tell you how to plug them.
- Your church’s chief money person answers a bunch of questions online
- He or she fields questions out to others as needed
- Others review the responses and correct them as necessary
- We produce a book showing what is being done well and what could be improved
- The book also includes a ‘best practices’ section and a plan to do it all with the minimum number of people
- We print copies of the book for the pastor and each board member, and
- We meet by video conference to discuss implementation