Fraud within a church shakes a congregation. The speculation of fraud can do just as much damage as actual fraud, causing people to turn against one another. Just as preventing fraud should be a priority for churches, protecting those who serve in the capacity of a church’s bookkeeper should also be a priority.
Individuals who serve in a church bookkeeping capacity work with a servant hearts and are often among the best of the congregation. They are tasked with a role that requires attention to detail, diligence, and thoroughness. Keeping up with the finances of a church comes with headaches; do not let the speculation of fraud be one. Below are a few simple but effective ways your church can protect your bookkeeper.
Set Intentional Internal Controls.
Internal controls are the most significant piece of the puzzle. Without proper internal controls, your church is left unprotected to potential fraud and leaves your bookkeeper open to suspicion and speculation. None of this belongs in a healthy church.
Setting intentional internal controls mitigates fraud risk. Segregation of duties is one of, if not the most important, internal control that should be implemented. As an example of this internal control, there should not be only one person spending the funds, bookkeeping those same expenses, and reconciling the bank statements. In addition to segregation of duties, healthy internal controls include restricting who has access to church funds and cards, creating expense management and approval procedures, outside reconciliation of accounts, and monitoring from a knowledgeable independent party.
If you are looking for internal control solutions tailored to your church, Wisdom can help!
Invite an Independent Set of Eyes to Monitor Your Books.
Creating an environment where monitoring is included in the normal church financial practices deters fraudulent activity. Allowing independent, trained eyes to examine the activities involved in your church finances either month to month or each year creates an atmosphere where problems are observed, exposed, and addressed; concerns are brought to light; and where your bookkeeper has support. An independent party monitoring the church financial activity is invaluable. In practice there are several ways this could happen.
Monthly Monitoring Solutions
On a monthly basis this could mean an independent accountant reconciles the bank accounts and credit cards, creates reports, and offers guidance. In addition, a church could choose to invite an independent accountant to take part in the bookkeeping duties in a larger, more consistent capacity. This is a great option for churches who are looking to outsource their bookkeeping to free up time for their pastor, administrator, or volunteers, in addition to deterring fraud.
Engage in a Yearly Financial Statement Preparation
If a church is looking for monitoring on a more yearly basis, many churches turn to a yearly financial statement preparation over the traditional audit, review, or compilation. In the world of accounting, those three types of engagements come with a long list of requirements that are not always pertinent or economical for churches. Engaging in a financial statement preparation every year can give your church piece of mind that a CPA has examined the books and prepared the financial statements without the price tag or hassle of an audit, review, or compilation.
These simple, but effective, measures protect not only your church from fraud, but also your church bookkeeper from negative assumptions and speculation. By defending your church from fraud, you are also protecting your church bookkeeper, honoring their commitment, time, and responsibility to the church.
Wisdom guides churches across America in both safeguarding their church and their bookkeepers from fraud. We would love to guide you in implementing these principles in a way that works for your unique church.
Send us an email or give us a call to learn more!
For there is nothing hidden that will not be disclosed, and nothing concealed that will not be known or brought out into the open.
Luke 8:17 NIV
