2. Staff buy-in
If the senior-level employees of the church are not committed to doing things right, no amount of fraud-prevention measures will provide protection. Policies and procedures may be in place, but odds are, they will not be obeyed. That’s why it’s crucial to have buy-in by executives and management-level church employees. The church’s leadership, as the word implies, has the responsibility to take the lead in communicating acceptable values to other staff, to set a proper example, and to encourage subordinates to do the right thing.
They can’t just talk a good game, either; they must back up their words with actions. One simple example is expense reports. In spite of the fact that filling out expense reports can be a nuisance and takes time out of their busy schedules, the senior staff has to understand their necessity. Willfully complying without complaining is a great example of reinforcing the proper tone at the top. You can rest assured that sarcastic remarks by a senior employee about having to mess with expense reports will reverberate throughout the entire church – negatively!
3. An empowered leadership team
Many of the spectacular financial scandals in recent years have one thing in common: They involve ministries or churches “ruled” by a single individual accountable to no one but himself. With no checks and balances and vast amounts of cash, most of us would find it difficult to resist temptation. As in all areas of life, we need help in staying accountable. Scripture backs this up in Ecclesiastes 4:9-12. That’s why a strong, empowered leadership team is crucial to effective fraud prevention.
- The leadership team can’t be a figurehead and should include, at a minimum, some of the following characteristics:
- It must be formally established by the church through its articles of incorporation, bylaws, constitution or other governing documents.
- Leadership must have the authority to make difficult decisions, not simply to rubber-stamp others’ decisions.
- The team also must be given permission and encouraged to ask difficult or uncomfortable questions.
- It must be an ongoing team; temporary task forces seldom accomplish much.
These factors will help establish the tone of the organization, helping it begin to ward off financial predators. However, the leadership team must be constantly reminded that they serve a church. Churches don’t need overseers. They need servants.
4. Competent volunteers
Without question, the Church is the greatest volunteer organization in the history of the world. From its very beginning, churches have been dependent on people who take no pay; instead, earning their living in the marketplace. In spite of this wonderful tradition, volunteers tend to be taken for granted in two ways.
First, churches seldom express proper appreciation to their volunteers for their countless hours of dedicated service. Looking at it in simple financial terms, could you imagine how much it would cost if the church had to pay for the volunteers who feed the hungry, visit the sick and lonely, teach Sunday school and, yes, count the Sunday offerings?
A second way volunteers are taken for granted occurs when churches pay too little attention to the way that volunteers carry out their duties. Volunteers tend to be engaged on a turnkey basis, meaning they are asked to get certain things accomplished but given no real guidance on how to get the job done. As a result, sometimes the wrong person may end up in the wrong place doing the wrong things. Two areas where this has caused churches immense pain are taking care of the church’s children and money.
A few steps churches should take to improve and protect their volunteer force include:
- Screening potential volunteers; it’s always possible that an individual’s motives for stepping up to volunteer may not be so noble.
- Providing formal training and orientation to increase volunteers’ efficiency and reinforce the church’s commitment to doing the right thing
- Taking steps to ensure that the church’s volunteers remain effective; continuing education is just as important for volunteers as it is for a church’s professional staff
As tempting as it may be to jump into action, it’s much more important to take the time to put a strong foundation in place to prevent fraud. Because what’s more important – the time you’re making, or the direction you’re heading? Make sure your church never has to make a u-turn when it comes to fraud.
Verne Hargrave is a certified fraud examiner and CPA. He joined Pickens, Snodgrass and Koch LLP (PSK) in 1978 and has been a partner since 1987. He also served eight years as a bivocational pastor. Hargrave oversees and conducts numerous church audits, and supervises the church accounting and compliance departments of PSK. A NACBA member, he also speaks at various churches and ministry-related seminars. Contact him at 817.664.3000 or [email protected]
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