Praise the Lord and Pass the Internal Control

Do you go to church? Have you ever been to a church?

I’m not asking because I’m worried about your soul.

Have you ever wondered what happens to the collection that is taken during the service? You should find out. If you tithe, do you carefully check your record of tithes against the statement sent to you by your church? If not, you need to start.

I’m not disrespecting churches. But there are some church volunteers who need to be watched. Closely.

I recently investigated a fraud committed by a founder and involved volunteer against her newly organized church. One of her duties was to “pass the plate” during church services. She was also responsible for counting the money and taking the deposit to the bank. Do you see where I’m going with this?

She didn’t collect the money by herself. She always had a partner who helped count the money. She also worked at a bank (her church’s bank; more on that later). One of her counting partners mentioned that she lost him when she counted because she could count so fast. No one dared to ask her to slow down because she was loud and had a strong and abrasive personality. EVERYONE WAS AFRAID OF HER.

The first thing I do during an investigation is document the circumstances and procedures followed in the area where a fraud is thought to have occurred. At the conclusion of interviews at the church, I noted the following red flags:

• Profile: typical – middle aged woman in a leadership role with control of important procedures;
• Others were afraid to talk to the alleged fraudster;
• There were steps in the collection and deposit procedure when she was able to act alone;
• She worked in a management position at the church’s bank;
• There were unexplained transactions on the bank statement;
• Church members had complained that their annual giving statements were incorrect.

Some additional procedural weaknesses were noted:

• The amount deposited each Sunday was not compared to completed count sheets that were signed by the counters;
• The bank statement was never reconciled to the check register;
• The church blindly trusted its leaders and volunteers.

Unfortunately, the records at the church were not tight enough to quickly produce any direct evidence. Because this young church was operating on a shoestring, I investigated just long enough to obtain sufficient circumstantial evidence to justify her interrogation by authorities to hopefully elicit a confession. I don’t know if that’s happened yet. I was assured that the church would eventually do whatever is necessary to pursue charges and conviction. Sadly, this is unusual.

The church leadership has notified the bank of an employee that may have illegally accessed the church’s bank account. They were met with an extreme lack of cooperation and denial from the bank’s leadership, including their security officer. Last I heard, the alleged fraudster is still employed at that bank. The church moved their bank accounts.

Lastly, and perhaps the most compelling, if not direct, evidence of all: since the alleged fraudster was relieved of her collection and deposit responsibilities, collections are way up!