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!

Safeguarding your church from fraud

Below are a few instant improvements you can make to how your church handles tithes and offerings that can begin to safeguard your church from fraud. For a more extensive list, read this blog.

  • Select multiple money counters, regardless of the size of your church. At StartCHURCH, we always suggest three as the magic number—three people, not related to each other if possible. This creates and environment of accountability.
  • Select a safe room for the counters to do their job. Even if you are a portable church, find a secure area that has a locked door. It is not uncommon for churches to have the offerings counted in an unsecured environment. These are places without locks on the doors or common throughways for people. Look at your location and consider where is the most secure place the counters can focus on the job at hand without distractions.
  • Have the proper counting polices in place. Every dollar and every coin should be counted and have the signatures of all three counters. Consider using a count sheet that shows exactly how much came in and in what form—cash, coins, cards or checks. Make sure that the deposit slip is returned and stapled to the actual count sheet that reflects the exact amount counted by the counters. This will ensure that no monies were removed or lost in transition.
  • Have the proper policies in place in order to properly handle reimbursements. Section 62a of the Internal Revenue Code spells out the requirements for reimbursements. In addition to adopting an accountable reimbursement policy, have in writing the procedures for reimbursements. For example, do not reimburse anyone for an offering given until the said check has cleared the bank account. These kinds of simple rules can help you avoid scams such as kiting.
  • Do a quarterly review of the church’s income and expense statements. Have a skilled financial person review the books to ensure that the offering count sheets, deposit slips and donor records are consistent. Doing this regularly will both create an environment of accountability and will also shorten the time that someone can get away with something unscrupulous, mitigating the overall damage.
  • Have a financial audit of the church’s records annually by a third party to verify accuracy of data and to catch any accounting mistakes. The church’s name and reputation, not to mention the actual impact the donations can make for the kingdom, are worth protecting. Taking these steps will decrease the likelihood of fraud and other financial scams.

(This article originally appeared here, and is used by permission.)

Pages: 1 2