Suppose, beloved pastor, you wanted to know how much money your church had on hand today. How would you find out?
You could ask the financial secretary and she would give you a number but how do you know this is accurate? (Hint: You don’t).
You could find the latest financial report given to the church but this might not be current and, besides, the figure might not be correct.
You could call the bank if you are an authorized church person and they would tell you. While this would answer the question, you might not on the bank’s list of approved persons to whom they may release information. In that case, you get one of the people who is and go to the bank with them, or possibly access it online. There is the risk that you would be considered overly inquisitive about the information or mistrustful of church personnel.
But, you persist and get a number.
How do you know this is an accurate amount?
You may or may not have an accurate number. You don’t know if the number your administrative assistant or treasurer wrote down for you is correct. The latest bank statement would probably suffice if it is not too dated.
What I’m getting at is this: your church could be flat broke and you might not know it. The financial software can be manipulated by your secretary. The reports given to the church could be inaccurate. While we would like to think all of our volunteers and employees are honest and trustworthy, the fact is that many are not.
Recently, a large church in my area found out that they were broke. No money on hand at all for the payroll, current bills, or other routine expenses. Predictably, there was a simple explanation for this. The financial secretary had been stealing from the church. There was nothing particularly sophisticated about it. She wrote checks to herself over a period of time. Eventually, the sum approached six figures and people caught on but not until she cleaned them out.
Didn’t anyone in that church look at the bank statements? Didn’t the church require two signatures (both of which can be forged, of course, and banks are unlikely to catch it)? Isn’t there some oversight committee that does an annual audit?
No. No. No.
Was the pastor so disengaged that he or she never bothered to take a look?
The money’s gone and the church is flat broke. They will survive because of generous and understanding members who might be upset at the failure of church leadership to protect against simple theft but will step up and keep the church going until the mess is managed.
This happens. All. The. Time. It happens in churches, in PTAs, sports booster clubs, and other nonprofits. All. The. Time. More now than ever, so I’m informed.
My state convention (doubtless all of them as well), LifeWay, GuideStone regularly address this but churches are known for closing the barn door after the horses have fled. It doesn’t require much to put simple internal controls in place.
Ten Ways To Prevent Embezzlement of Church Funds is a good place to start. The average SBC church has around 125 in the pews on Sundays. The median SBC church is about 70. Volunteers likely handle church finances. For the pastor who would like to know if his church has the proper controls in place, start by answering these questions:
- Do you know what your bank balances are? What the church income and expenses are? If not, you might want to be less disengaged. It’s ultimately your responsibility. Chances are the church will appreciate that their pastor is serious about this.
- Do you have a church treasurer? Does he or she know what their responsibilities are? “Sure, pastor, I’ll be treasurer if I don’t have to do much” will not be good enough. You need not have a CPA but someone who will understand the issues, pay attention to how money is handled, and call finance committee meetings. You need a treasurer who is curious and nosy and who doesn’t mind asking quesitons about church finances.
- Does the church have a team or committee that oversees finances? Deacons sometimes do this. Do they know what they need to do?
- Who collects the offerings? Who counts them? And who makes the deposit? One person, same person? Multiple persons should handle the money at all times.
- Who can sign checks? One person or more than one? Same person who counts the money? More than one is best but many churches just have one. In such cases, someone else should scrutinize the bank statement each month.
- Does the same person who writes checks sign them? Are they the one who receives and checks the bank statement? Does anyone else ever look at the bank statement?
- Are regular reports made to the congregation? The more the church knows the better all this will be.
- Do you use sealed bank bags? The cheap disposable ones work well.
- Does your church conduct some level of annual financial review? A time when you look at the income, expenses, checks, statements but also review your procedures.
- Do you or some church committee track income and expenses to see if anything looks askew?
As a pastor, I refused to handle church funds. I refused to be a signer of checks but I doggone made sure I knew what was going on with church finances. In retirement I’ve been asked to work with some churches regarding their financial procedures. Most churches want to do things properly but may not be sure where to start or what to do. There are simple solutions to most problems in this area but being proactive is the key.
I have occasionally been asked to return to my last church, we still live in the community, and I assist by preaching and teaching. When the church was without a pastor and financial matters got a bit out of hand, sloppiness not embezzlement, I was recalled to do some administrative work to straighten out some messes. As a part of that, I spent a few weeks with the tellers counting the Sunday offerings. In addition to that, I was asked to be a cosigner on church checks, something I had never done.
When the church finally called a new pastor, I told my friends on the search committee to inform the new guy that the former pastor would be signing his paychecks. This, I believed, would be the ultimate test of God’s calling this man to the church. How does that sound as an exercise of raw power? I sign my successor’s paychecks. When the new guy moved to the community, I stopped by to visit and we had a good laugh about it. I no longer sign his checks.
So, what do you do with the employee or church volunteeer who is caught stealing from the church? My view is that you report them and see that they are prosecuted. Chances are they will steal again if given the chance.
Hey…pastor…pay attention to finances. Your church might be broke.