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Cash storage 101

The Case   He was a frequent visitor at the church. He was homeless, but often came for free food. One Sunday evening he came to worship. He stayed after the service. Hiding, until everyone was gone.   After everyone left, he helped himself to the food in the kitchen. He also helped himself to…
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May 23, 2019 0

What could possibly go wrong?

The Case In 2003, he was bankrupt, had $150 in the bank, $50 in his pocket, and $98,000 in debts. That same year, the church hired him at $125 a month to be their bookkeeper. They gave him unrestricted access to the books – the right thing to do for a bookkeeper. But they also…
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May 14, 2019 0

AND a church fire…

The Case Southern Baptist churches are independent – the association is one of shared beliefs rather than shared accountants and auditors. That means that the churches run the gamut from well-run to, shall we say, “informal.” This church appears to have been on the “informal” side. And one day they had a fire which destroyed…
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May 1, 2019 0

Embezzlement, or Error?

The Case: With a confession and a signed promissory note,  it is likely that this was a case of embezzlement, but we’ll never really know. The suspect died before providing police with documents he said showed that the problem was a bookkeeping error. The church filed a fraud report with police claiming that the suspect,…
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April 11, 2019 0

One set of eyes

The Case It was a Greek Orthodox church of about 250 members – but it could have been your church. They hired one of their members as a secretary/bookkeeper to keep things straight. Her job was to run the office, of course, and this included opening the mail, taking care of folks who came in…
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March 18, 2019 0

Transparency leads to more giving

This is an interesting video. Rather than making this too mercenary, I think we need to be good stewards of what we are given, and that good stewards are entrusted with more.


March 16, 2019 0

Short Version

It CAN happen at your church. ALL embezzlers were trusted: that’s how they got the money. Even Christ had one bad ‘un in his twelve. You really do need an audit of your financial procedures. No slam: allchurches do. We are LOTS cheaper than a CPA audit ($299 – $699, with scholarships for the tiniest churches, vs $3k-10K+). You will…
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March 12, 2019 0

Why we want separation of duties

  The Case   He was the business administrator for the church for 17 years. He was an active member, respected by all, and led contemporary worship services. He was also an embezzler.   He was in charge of all of the church finances, including setting up the outside audits. One year he hired a…
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March 9, 2019 0

We have this rich uncle…

The Case   Start with two administrators of a private catholic school. Add a gambling addiction. What could possibly go wrong?   The two Sisters were principal and vice-principal of a catholic school. They were responsible for taking in checks and depositing them at the bank. Some checks made it there, and some made it…
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March 8, 2019 0

Why the pastor gets the statement first

The Case The church secretary was trusted – too much. She took care of the bills and the paperwork, and all was well. At least that’s what they thought. One day, the postman arrived while the secretary was out. Normally, the postman gave the mail to the secretary. But the pastor happened to be in…
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March 8, 2019 0

Smith residence… oh, yeah, and MegaCorp Janitorial…

The Case Bob was a church administrator, and it was his job to keep the church running smoothly. He hired the the cleaning crew, paid the utilities, and made sure they had paper towels in the restrooms.  He also paid himself. You see, Bob wasn’t just the one who paid the bills – he was…
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March 7, 2019 0

Credit card misuse

The Case The 23-year-old church staffer was issued a church credit card. It was supposed to be used for church expenses, but maybe she wasn’t told. Over a nearly two year period, she used the card made about 1,400 unauthorized purchases. The total came to about $50,000. All of these were for personal use, and…
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March 6, 2019 0

Wait – WHAT was her name?

  The Case   Professor Smith taught accounting, and had a promising student in her fraud-prevention class. He was working on an extracurricular project for his church. They were trying to find out how much they had lost to an embezzling secretary.   The secretary was in serious financial trouble when she was hired. But…
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March 1, 2019 0

Conference Behavior 101

When the church sends you off to a conference, they expect you to go, learn something, and come back. They do NOT expect you to take the other woman with you and miss the conference.   The Case   The nondenominational campus group was off to an out-of-state retreat during Spring Break. The pastor drove…
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February 27, 2019 0

A background check would have been wise.

The Case The church Food Bank needed a manager, and took on a volunteer to do the work. She took in donations from supermarkets, other organizations, and from the public. All was going well… until they discovered that she was forging checks. And she had been doing so for 14 months. She pled guilty to…
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February 26, 2019 0

Removing temptation

Talk to a fraud examiner and he or she will launch into a lecture about the “Fraud Triangle”. Briefly, this explanation (well-accepted since it was published in 1949) says that fraud involves three key elements: Financial Need: This could be a spouse with cancer and no money for the expensive drugs. Or a lost job and…
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February 25, 2019 0

We’re supposed to look at bank statements?

The Case   The church had a bookkeeper who kept track of the church finances. She was in charge of preparing checks, and of reconciling the bank statements each month.   But nobody checked her work.   Had they been paying attention, they would have noticed a few things. There were a large number of…
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February 25, 2019 0

Just sign these blank checks…

As a Fraud Examiner I read reports of church fraud happening all over the world. I confess, it’s somewhat distant: I see the wreckage and grieve the loss, but I move on pretty quickly. This case hit me every day. I would drive through a small town in the hills of Virginia on the way…
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February 25, 2019 0

Sorry I’m late!

A couple arrived at church after the collection. They quietly slipped into the back row.   But on the way the fellow slipped a few twenty-dollar bills to one of the deacons to include with the collection. The deacon took the money and nodded… and then had to decide what to do with the cash.…
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February 24, 2019 0

Oh, THAT bank account!

The Case The members of The Church Down The Way were a wonderful bunch. The showed up to Wednesday meetings, and two services on Sunday. Pastor Jones was a gifted speaker, and he often told stories of missionaries and the good they did. The members often contributed to further the good works they heard about.…
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February 24, 2019 0