Theft does happen in faith-based organizations.
Do you wonder who would steal money from the faithful? According to the Association of Certified Fraud Examiners (ACFE): anyone with access.
Here are their most recent findings:
- The majority of perpetrators are between their mid-thirties and mid-fifties in age, are educated, and have access to the money
- The average length of time the fraud is committed is 12 to 18 months
- Those organizations that do not have independent audits annually are most vulnerable, as the fraud could go undetected for long periods of time, increasing the likelihood of significant losses
- The smaller the organization, the more likely theft will occur
Theft in churches happens in these ways:
- Larceny - occurs after the money has been counted, deposited and recorded in the books of the organization, and the thief devises a way to get the money out of the checking account
- Skimming - occurs when donations go missing before they are ever logged in the books
Are you concerned about fraud?
If you are uncertain but concerned, we can provide services to determine how much fraud was committed
If you know a theft has occured, we can provide necessary documentation to recover the money from insurance policies or to assist law enforcement in prosecution.
Four Controls to Reduce the Chance of Theft
Ensure that at least two people are with the money at all times
This must be followed without exception if it is going to work. The control is not effective if one person takes the money from the collection plate to a place of counting or the safe after worship. It is not effective if one person goes to copy the checks and leaves another person in the room with the cash. It is not effective if one person takes the money to the bank after it has been counted and locked in a bank bag.
Separate duties by design - not happenstance
Faith-based organizations are short on staff and rely heavily on volunteers. It's likely that volunteers lack experience in business-based policies and internal controls. It is also likely that organizations do not have effective controls are in place. Even more rarely do they inspect them to see if they are working properly. Written policies and procedures help remind those assuming governance roles and volunteers who perform services for the organization why the processes exist and allow for consistent application of safeguards.
Treat all opportunities for giving the same as collection-plate giving
While the largest amount of giving usually occurs during worship services, there are other times when money comes into the organization. Mid-week suppers, fundraising activities, day schools, thrift stores or other outlets need the same level of control and asset safeguards. Often these sources are not viewed as generating a significant amount of money. Therefore, they provide one of the greatest opportunities for skimming because of the lack of attention to the detail during counting and depositing.
Provide oversight and reconciliation of online giving
Online banking makes our personal lives easier, but in a faith-based organization, convenience does not always include effective controls. The rapid increase in online giving creates a new challenge for safeguarding of contributions. Separation of the duties in processing and reconciling the contributions is essential.
Protect the Donor, Protect the Church and Protect Those Who Handle the Money
Have a confidential discussion with one of our Certified Fraud Examiners today.
Properly Accounting for Money
