The Center for the Study of Global Christianity projects the global Christian church will lose $50 billion through ecclesiastical crime—church fraud—in 2015, five billion more than they project Christians will give toward foreign missions.1
Sadly, the Seventh-day Adventist Church is not immune. Fraud can and does happen in our churches.
According to the Association of Certified Fraud Examiners, three elements must exist for a fraud to take place.
Pressure can be a personal or a perceived need, but the motivation is always the same. Money is needed. Pressure-causing events can include:
• A medical emergency leaves a family with a mountain of debt.
• A gambling addiction gets out of control.
• A lost job leaves one desperate for funds.
• A church needs “help” to get a higher return on their assets.
As church members, we must be observant to notice when a
fellow member may be experiencing financial distress. If we learn of
a situation, it is our responsibility to inform the pastor or head elder of
our concern with that particular member handling church resources
during their time of financial anxiety.
Rationalizing that something wrong is now okay can take a lot
of time and a variety of circumstances, but the heart being deceitful
above all things (Jer. 17:9) makes it easy for someone to deceive
themselves with a “rational lie” such as:
• I’m entitled to this money because of all the work I’ve done.
• I’m just borrowing the money until my next paycheck.
• It’s okay because other people do it.
• Money will help more people if used my way.
Rationalization is the hardest to observe because it transpires
in a person’s mind. Be attentive to trends in comments or attitude
that suggest an internal change in thought process. If trends persist,
question them and reaffirm the values you both should hold.
An opportunity is available because of weaknesses in an organization’s
internal controls. Internal controls are processes in place
to detect and prevent fraud. Common weaknesses in these controls
might exist because of tradition or because effort has not been given
to protect the resources entrusted. Ask these questions:
• Do we have enough people involved in the process?
• When was the last time we evaluated established controls for weaknesses?
• Are we placing too much trust in one person’s good character?
A church’s best chance at lowering their risk of fraud is by removing
opportunities for fraud to take place. An opportunity may be
discovered when a mistake slips through the church’s controls. This
discovery is acted on when financial pressure is felt and justification
found. Periodically meeting and reassessing your financial controls
can lessen these opportunities.
INTERNAL CONTROLS TO PREVENT FRAUD AT YOUR CHURCH
Good financial controls provide protection. If a false accusation is
charged against a person, the only security they have is the controls
that are in place. You want internal controls that protect resources
while not overburdening the individuals doing the work.
Segregation of Duties – It is ideal to separate bookkeeping and depositing responsibilities.
Handling of Cash – Loose cash should always be counted by two individuals at the same time. This should not be done alone or taken home. Cash is the most susceptible resource to fraud. Encourage members to donate online or by check using tithe envelopes.
Approvals – Establish processes for those who sign checks, approve large payments, and reconcile statements. This should be multiple people, not just one person.
Conflict of Interest – Conflicting interests may cloud or corrupt a member’s judgment. Be aware of a member’s potential benefit from offering a “good deal” or providing the church services.
Regular Financial Audits – To help prevent fraud, the local conference
is responsible to provide periodic audits of local church financial
records. If your church has not been audited in the last two years,
contact your local conference treasurer to have an audit scheduled.
From the church employee at the General Conference to the local
deacon that collects the offering on Sabbath, we are all responsible
for the safekeeping of our church’s financial resources. When
a gift is placed in the offering plate, the giver is extending trust to
our stewardship system and the multiple people who ensure their
money reaches its requested destination. Review the internal control
systems at your church so this trust is not broken.
1 Christianity 2015: Religious Diversity and Personal Contact, a report from
the Center for the Study of Global Christianity, accessed June 8, 2015. http://
Andrew Moll is financial analyst for Adventist Risk Management, Inc.