Guarding Against Embezzlement

Financial checks and balances are essential in todays culture. However, this article reveals ministries must now go further.This is worth posting for Redeemed Ministerium and for all of the represented ministries. Check out these extracts from Leadership.Net.
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"Embezzlement is on the rise in churches of all sizes. One major church insurer logged 32 embezzlement-related claims in 2009, up 12.5 percent from its recent annual averages. "Regrettably, financial misconduct tends to be more predominant in economic down times," says David Middlebrook, a Texas-based attorney specializing in church law.

Fraud experts often refer to a three-legged stool for embezzlement risk: opportunity, need, and organizational ethos.

>Opportunity often is born out of non-existent or poorly managed financial controls.

>In terms of need, church leaders must pay attention to hardships in the lives of their employees. The most common scenario for church fraud involves longtime employees who face an unexpected financial stress—a job loss for a spouse or an extended illness with hefty medical bills for a family member.

Some studies suggest the average tenure of a church employee who commits fraud is seven years. "These employees don't start off thinking they're going to steal," says Frank Sommerville, another Texas attorney. "They think they're going to borrow from you and pay you back when things improve."

>An ethos that encourages transparency and requires high standards helps prevent financial misconduct. Sommerville advises, "It really is helpful if churches create this above-reproach, ethical standard, something they continually talk about and include in their code of ethics—'We're going to operate above reproach in every area of ministry from the senior pastor and board on down.'"—from Your Church magazine (Jan/Feb 2010)

What to Watch For:

Workers with stressful financial situations
Infrequent audits from outside CPAs
Little oversight of collections
Too few people count the offerings
No rotation among finance team members

http://www.christianitytoday.com/le/thepastor/administration/guardagainst.html