Preventing Fraud in Your Church

Preventing Fraud in Your Church

Creating an environment of trust is one of several crucial aspects of developing a culture where generosity can flourish.  The people who give to your ministry must believe that their intentions will be honored and that their gifts will not be wasted or mismanaged.  One important step to achieve this condition is putting in place proper internal controls on how all money is handled – both on the income and on the expense side of the ledger.

This webinar will walk you through the steps you need to consider to both assess your risk and to implement policy that will help to mitigate that risk.  Fraud occurs when three conditions exist: opportunity, motivation and rationalization.  Organizations cannot control motivation and rationalization, but they can limit opportunity.

Of course we trust the people we hire or ask to assist us with fiduciary responsibilities, or they would not be in those positions.  Because we care about them, we do not want them to be vulnerable to suspicion or temptation.  As a congregation, our reputations are at stake as well as the good will of our donors.  Putting these measures in place is simply good stewardship and acceptable accounting practice.

If we decide we need to make changes – we need to be clear about the fact that no one is suspected of doing anything inappropriate (unless there is reason to believe otherwise!) and that we are doing this to protect everyone – those who handle the money and those who choose to make the gifts.

We would offer a note here about audits.  The Center for Faith and Giving believes that regular auditing is important and should be done in congregations of all sizes.  Many, however, cannot afford a full audit annually.  In such a case, we suggest that an audit should be performed if there has not been one done in the last 10 years (this is as much about reviewing your procedures and policies as uncovering any mistakes or maleficence); if someone has raised a concern about irregularities; or any time a new person takes the position of treasurer, bookkeeper, or financial secretary.  When done each time there is a transition, we are seeking to assure that the out going position holder has done their job effectively and that the incoming position holder has a “clean” set of books from which to work.

This webinar was produced by Church Executive Magazine in cooperation with Guide One Insurance and is shared on our site by permission.

Click here to view the webinar.