How Can My Church Prevent Embezzlement?
Pastor Tom just began his ministry at First Church and is dealing with the aftermath of a $50,000 embezzlement incident involving a bookkeeper who stole from the offering every Sunday. What can Pastor Tom do to prevent future embezzlement?
Understanding Embezzlement
Embezzlement is the wrongful conversion of funds that are lawfully in one's possession. It is a common issue in churches due to weak internal controls. Here are several steps Pastor Tom can take to safeguard the church's finances.
Counting the Offering
Dual Counters: Ensure all offerings are counted immediately by at least two authorized persons before funds are removed from the church premises.
Rotating Teams: Use multiple two-person teams to alternate counting the offerings whenever possible.
Avoid Family Teams: Ensure that the counting team is not composed of a husband/wife, immediate family members, or family members by marriage.
Secure Location: Count offerings in a secure room on the church premises.
Receipt Form: Use an offering receipts form that is signed in duplicate by those counting the offering.
Depositing Funds
Form Distribution: Deliver one copy of the offering receipts form to the treasurer and the other to the church office.
Immediate Deposit: Deposit all funds immediately, or as soon as practicably feasible, into the church’s bank account.
Secure Storage: Keep any funds not yet deposited in a locked safe on the church’s premises until deposited.
Effective Monitoring
Verification: The treasurer and church office should ensure that the offering receipts form and the deposited amount match.
Record Keeping: The treasurer should maintain a record of all receipts and disbursements of the church, including all individual contributions.
Regular Audits: The Board should audit the treasurer’s reports at least quarterly.
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