When I saw  headlines in the Minneapolis-St. Paul Star Tribune News concerning a church treasurer that embezzled $240,000, I started remembering a number of such cases that I became aware of during my days on the road training users of Shelby’s financial modules.  While a number of church  embezzlement cases make headlines, many cases are never reported to authorities.  In fact, the dozen or so situations that I stumbled across while on the road were never prosecuted.  And, in all those cases I believe that the church was somewhat responsible for making it easy for someone who is easily tempted to “borrow money from the collection plate”.  While each case was unique, I noticed three commonalities. 

  1. Not having or not requiring bookkeepers to use a financial software package that enforces accountability.  From my experience all of the cases came to light during a transition.  The majority of the dozen or thefts were discovered when the church moved from Quicken, QuickBooks, or a manual bookkeeping system to Shelby Financials.  Such systems are very easily manipulated and supervisory tracking is minimal at best.  Therefore is it very easy to either falsify or change entries after reports are generated, masking questionable activity.  The rest of the cases were discovered when training a replacement or cross training another bookkeeper.  In the later cases, most of the seasoned bookkeepers were keeping manual records or duplicate sets of books.  (One even had a bogus church checking account that was used to keep the books appearing correct.)
  2. Not having or enforcing sound internal controls.  Surprisingly, a number of churches allow the same person that counts the money to also make the bank deposit and/or make the receipt entries into the accounting system.  I vividly recall one church where I was call to train new bookkeepers twice.  The first time was the result of the pastor releasing a lady for skimming money from the collection during the counting procedure.  While training this first time I recommended that they make two changes to their procedure.  First, have more than one person count the money and verify the deposit.  Second, change their chart of accounts in such a manner that would facilitate their internal controls.  The Pastor liked both ideas.  Less than one year later I was called back to train the second new bookkeeper; same reason.  They had not changed any internal procedures and my first trainee was released for theft.  The story repeated itself again, but I was not available to train the third replacement.  However, I did have a conversation with the Pastor and reminded him that he had done nothing to remove the temptation to steal.
  3. Not conducting background checks or verifying previous employment.  It is simply amazing how many pastors trust just about everyone that they employee.  And why not?  Would there be anyone who would steal from a church?  Would it be an insult to require such a check, especially if the applicant was also a member of the congregation? 

One thought on “Are Churches somewhat Responsible for Bookkeeper Embezzlement?”

  1. We have seen the same things many times, Alfred. In addition to running good software, the easiest thing to do is require that all who handle finances be bonded. That delegates the background check to an insurance company who will be thorough.

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