What could possibly go wrong?
Fraud in churches always involves three elements: Financial Need, Opportunity, and Rationalization.
- This fellow had the financial need: he had only $200 to his name.
- Opportunity: he had access to both the assets and the books. This is a classic recipe for embezzlement.
- Rationalization: he was being paid $125 a month. Bookkeepers ought to get more than that. So one of his rationalizations was likely, “They aren’t paying me enough – I’ll help them do what is right.” He also might have figured that the church was in the business of giving to the poor, and he qualified. He claimed, too, that he considered the money to be a loan from the church that he was going to pay back.
How To Prevent This From Happening At Your Church
- Before appointing or hiring someone at your church, run a background check;
- If the new person will have any financial responsibilities, run a credit check. This can be ticklish in some states: discuss this with your lawyer;
- Give your bookkeeper access to your books, of course. But DO NOT give him or her access to the assets. They should NEVER be a check-signer, use a signature stamp, or have a church debit or credit card;
- Have the bank and credit card company mail the statements to the pastor. He should look them over before handing them to the bookkeeper.
- Swap bookkeepers with a sister church to look over the books. This is lots cheaper than a CPA audit, and is likely good enough to spot weaknesses. (CPA audits are more for investors making comparisons between opportunities.)