But I donated already!

checks

Your church takes checks – great! But a check made out to your church isn’t a guarantee it will get to your 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 own (bogus) account. Then they might even send the donor a thank-you note from the church. 
 
This week’s case describes a priest who used church checks to pad his retirement account. He stole at least 500 checks from 135 different individuals. Over the four years he did this, he stole over $76,000.
 
Members wrote the checks for charity, church maintenance, or renovations. But the checks didn’t go to the church account. Instead, they went to his own account. His account had a similar-sounding name, so the bank deposited the checks he presented. Link
 
Analysis
 
This is an example of stolen check fraud – a variety of skimming. While members wrote checks to the church, the checks never arrived. As a skimming fraud, these are difficult to discover because the funds never appear on the church’s books.
 
But an audit committee can discover these sorts of fraud by checking donor records. An audit committee would look at the donations and the church books. They would ensure that the donor records matched the deposits and the ledger. They would also check with the donors to ensure that the amounts in the books were the amounts the donors sent. If the donor has a receipt for $500 but the books show $50, there is a problem!
 
A southern college had a similar episode. A fundraiser approached someone to ask for a donation. Surprised, the fellow said he had already given a check to the college president. Investigation showed that the check had indeed been cashed. But it had been deposited at the wrong bank in an account owned by the president, not by the college.
 
for deposit onlyTo prevent such fraud, two people should receive and open the mail. Two sets of eyes protect each other and keep each other honest! And as soon as checks arrive, they should immediately be stamped with the church’s ‘for deposit only’ stamp. They should also be photocopied or photographed and logged into a donor record. Even better would be to scan them for immediate deposit – check with your bank to see if they offer such as service.