If your church tightens its internal controls, you can expect these main benefits:
Prevent fraud, theft, and embezzlement
The goal of internal controls is to ensure that assets are used for what they’re intended for: you get a buck in the collection plate, and you want it to go to the poor… but the poor of the church’s choice rather than the usher who is behind on his flat-screen payment.
If you always have two people handling the money, and they’re always within sight of each other (and possibly on video), the money is likely to make it to the bank. It’s harder to steal when someone is watching. If you use fill-as-you-go temporary cards for purchases instead of a debit card on the main account, a ‘loose’ pastor won’t be able to charge his concert tickets or liquor to the church (I’m not making this up: see link… and imagine what the liquor store clerk’s thought of Christ, the church, and the pastor).
The plan is to make it harder for the person to take church money. If you convince the individual that there’s no way he or she can get away with it, he or she is far more likely to behave.
Fewer temptations for your staff and volunteers
But let’s assume that you have no bad sheep in the flock. Might be true. But even the good guys can get stressed. Imagine that a deacon’s wife comes down with cancer, and he changed jobs a month earlier. Many new hires do not become eligible for insurance for a few months. She needs some expensive drugs, and he’s at the end of his rope. To save his wife’s life, the only option he sees is to pocket some of the collection. Would he withstand the temptation? Heck, would I withstand the temptation? I sure hope I would.
But if you have another deacon watching him every second, he won’t see that this is a viable option. And if you’ve trained folks to watch for severe financial stress as a red flag for fraud or embezzlement, you might put him to work greeting folks instead of handling the money. And you might be able to provide counsel and support if you notice.
Protect the reputation of the church and your people
If you handle money like Pastor Casual does, you may be setting yourself up. Rev Casual, you see, keeps his money in his right pocket and church money in his left pocket. What would he say should someone accuse him of spending church money for personal items? NOTHING he could say would be of any use.
But if Rev C. were to have written policies, trained staff, and two deacons handling the cash (and a videotape) until it gets to the bank? He never gets within thirty feet of the cash! AND he has the church manual, witnesses, and the videotapes to prove it. Likewise, if there are strong policies for all of the church’s other financial policies, you are protecting the rest of your staff and volunteers as well.
Avoid church-splitting sticky situations.
Want to know how to win gun fights? Stay home, like I do. Let the bad guys shoot it out on the wrong side of town late at night: watch NetFlix, eat popcorn, surf the web, and raid the refrigerator instead.
By the same token, if you build out the fraud and embezzlement, you won’t have to deal with sticky situations. Let’s say that you discover that your trusted church treasurer has been taking church money for the last eight years:
- Do you really want to have her taken away in cuffs?
- Will you be asking her to leave? If so, what about half the church that is related to her?
- If you don’t report it to the cops, she’ll have no record and can do the same thing to the next church.
- Will you tell the congregation? (Don’t worry: it well get out.) How will you tell them? What will you tell them?
- Does the church have the funds to deal with the drop in donations, either from the exodus or from lack of trust? If you lost tens of thousands so far, what guarantee do members have that their money will get to the right place?
- How about the press? What will you say to them?
- And your insurance – they won’t pay if you are not willing to prosecute.
Rough questions, and no good answers. Tighten your internal controls and you won’t have to deal with these.
What to do now:
If you’re not part of your church’s leadership, please ask a couple of them to visit this website (www.AffordableChurchAuditing.com).
If you are in leadership, please show the video below during your next deacon’s or board meeting – and seriously consider calling us in. Our prices are well within reach, and we have a sliding scale for small churches if that applies to you. We’re much less expensive than a CPA audit, and we target what you really need to deal with first.
DEACON’S MEETING PRESENTATION (25 min)
Hope to hear from you soon!
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