Church frauds as weird and unpleasant as it may sound has become part of the system in most church across the world today. People now actively seek opportunities and loopholes in churches to steal money and commit other economic crimes. Some eyebrows were raised when I first wrote on the importance of accounting in churches; many saw me as an unholy person who sees everything from the perspective of a fraud fighter. Evidences now shows that the importance of accounting and good internal control makes a church and other places of worship a better and holier places as people will not be unnecessarily exposed to avoidable temptations. This article is written to educate church administrators about the activities of fraudsters in the church today. The principles shared in this article can also be used to effectively deter fraud in any kind of organization that involves volunteerism.
A meaningful fraud preventive measure in churches and other not for profit organizations cannot be developed and implemented if the causes of fraud are not clearly identified. This article will follow the approach of identifying causes and proffering solutions for each problem identified.
CAUSES AND POSSIBLE PREVENTIVES MEASURES
LACK OF PROPER CHECKS AND BALANCE
The chief cause of misappropriation of funds in the church is the absence of proper and formal checks and balances. A good place to start from is to clearly define the role of church workers. A cleaner in the church for instance has no business counting offering money. When this is done right, then checks should be put in place to monitor the activities of responsible officers. Examples of controls that can be put in place are
- One person should not be allowed to count money.
- The people that counted the money should not record it.
- Different set of people should take the money to the bank.
- The bank deposit slip should be handed over to the accounts clerk for proper recording.
- CCTV camera should be planted in the cash counting room.
- There shall be no single signatory account.
It is only in churches that people are allowed access to almost every corner without restriction.
MISPLACEMENT OF TRUST
Churches are not the only place where trust is found. In fact, no business can strive if it is not built on trust. The problem however is the misplacement of trust can is prevalent in the church. It is only in churches that a non qualified person will be allowed to carry out technical assignment. This creates loophole for waiting fraudster to strike. The responsible person for the project may be innocent and trustworthy but will create opportunity for more technically sound people under him or her to commit fraud. A good example is a situation whereby a person without accounting knowledge is made the treasurer of a church. He or she simply cannot oversee the treasury of the organization and ultimately create flaws. Suggestion- technically sound personnel should be made responsible officers.
INADEQUATE BACKGROUND CHECK
The nature of churches today has made it a place of refuge for criminals. This is made possible because nobody cares to conduct any form of audit on worshippers that subsequently become officers of the church. An unemployed man literarily forced his way into a steward in one of the local churches in my community with the sole aim of having access to the offering box. Conducting a background check on people before they assume certain positions in churches may be difficult as people do those works voluntarily and feel bad when they discover that background checks were being carried out on them. Hence, the best way to go about it is to let the person know before venturing into any form of investigation or character audit, if they truly are trustworthy, they would have no problem with that.
LACK OF REGULATION
Because there is no financial regulation that governs churches, many churches do not bother to keep good record of financial activities. Though some countries make churches pay taxes and other forms of levy, over 80% of countries of the world do not have some tax systems. Even those that have, much weight are not attached to the forms and contents of the accounts prepared by these organizations.
TOO MUCH RELIANCE ON THE SERVICES OF VOLUNTEERS
It is much difficult to place people under scrutiny when they are volunteers. One way to overcome this is to attach remuneration to every activity performed in the church. That way people will take it as their job and be ready to abide with any procedures in the work place.
MORAL DECAY IN CHURCHES
Many churches today have deviated from preaching holiness and salvation. What are mostly preached in churches today are prosperity and wealth. There is nothing wrong with preaching wealth and prosperity- after all wealth creation is Biblical. But that should not be the sole base of the teachings in the church. Morals should be taught in the church and periodic moral clinic held for workers in the church.
In as much as the above six points are not the causes of fraud in churches and other places of worship, effective control measure over these factors will reasonably reduce the incidence of fraudulent act in the church. My candid and standard recommendation to every leader of a church or non profit/social gathering is to seek the service of a qualified fraud professional and internal control personnel that will ensure that preventive, detective and corrective controls are designed developed and implemented in churches so as to deter fraudsters from polluting the atmosphere of worship. Churches should be taken as investments– in the house of God. Minimally, an asset register should be maintained.