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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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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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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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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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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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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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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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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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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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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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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I showed my work to a CPA friend yesterday, and he wrote, Using the word ‘audit’ concerns me a bit. Do you think that word has a certain connotation that may leave users thinking you are providing a certified audit? He raised a good point, which needs to be addressed. In fact, though addressing it…
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If you’re going to skim cash out of the church collection plate, there are certain rules to follow. One is that you should take the money when there is nobody watching. Another rule is that you should conceal your takings carefully. But when your practice is to take only bills and hide them in your…
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If you handle money like Pastor Bob does, you may be setting yourself up for trouble. Bob, 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…
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The Case Your church takes checks – great! But a check made out to your church isn’t a guarantee it will get to the church’s account. Someone could open a bank account across town with a name like the name of your church. Then when a check arrives they could deposit it to their…
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The Fraud Triangle is a model of why fraud occurs. It was originally developed by Donald Cressey in 1951. It is still used as a simple and clear way to understand why people commit fraud.
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