Protect Your Church From Fraud—Yes, YOU Could Be a Target!

There are four common types church fraud. As much as we’d like to not have to deal with this, the unfortunately reality is that this scenario is more common than you might imagine.

Protect Your Church From Fraud — Yes, YOU Could Be A Target!

Ministry life comes with many unforeseen challenges, but the one thing that always catches pastors by surprise is being faced with fraud in the church. As much as we’d like to not have to deal with this, the unfortunately reality is that this scenario is more common than you might imagine. There are four common types of church fraud.

  1. Donation Scam – Imagine sitting in your office and getting a call from the finance department saying that someone accidentally made a donation of four thousand instead of four hundred dollars, so the finance department just requests a signature on a check issuing a reimbursement to the individual. However, a few days later once the refund has been issued, the treasurer comes back and says there was a check with insufficient funds processed, a check in the amount of $4,000. Not only has the amount been charged back and a refund of $3,600 has already been issued, but no one can get a hold of the donor any more. This scam known as kiting is unfortunately becoming a common occurrence.
  2. Embezzlement by Church Leaders – Another type of fraud comes from the inside. Unfortunately, there was a recent case where a church’s financial director had been caught transferring small amounts of money from the church’s account to his/her personal bank account over the three-year period of the building fundraising campaign. The financial director was also responsible for depositing weekly donations and had been stealing portions of the cash donations from each deposit. These “small” transfers can add up and pretty soon you’re looking at thousands of missing dollars.
  3. Embezzlement by Bookkeepers –  Bookkeepers are responsible for overseeing the financial status of the organization. Sometimes, this trust and position of power within a church can lead to embezzlement of church funds. In recent headlines, a Georgia church’s bookkeeper was sentenced to two years in prison for embezzling $20,000.00.
  4. Fraudulent Check Activity – In the last few years, there has been an increase in checks being written to false corporations and even false scholarships being issued by church leaders, even pastors. Checks are made out in the name of these fraudulent scholarships or fraudulent or non-existent corporations, dispersing funds of the church for personal interest.

All of those instances can make managing church finances and avoiding fraud to feel overwhelming and can leave you with nothing but questions and concerns. However, there is good news. While no one can promise a church that they will never encounter any fraud, there are best practices that can be put into place that will help a church ensure that they are doing their best to protect what God has given them to lead.


Pages: 1 2