Ben Kononoff
Charitable Gift Planner
Canadian Pacific District
I was shaken! The letter was an unpaid bill from a transportation company. Over five hundred dollars owing for a church trip stared me in the face. Leadership thought it was paid. But - it was not paid! I called a sponsor that was trusted and mature. Asking him what happened to the money that was gathered from participants, he indicated that it was all handed over to the pastor. So why was the bill not paid? What went wrong? The pastor had resigned four months earlier. He was no longer in the community and was living in another province. Where was the money? It will not take too much imagination on your part to answer the last question. The following summary could have helped us as a church prevent the problem. Frankly speaking - it was our problem.
After being in the ministry for 36 years and having spent over 10 years on the road, I have seen or heard the following which are violations of good money management in the church -
1) One person counting an offering
2) Treasurers counting the offering
3) Cheques written as "Cash"
4) Mixing of designated monies
5) Churches carrying out internal audits and failing to get a neutral party to audit their financial affairs from the outside.
6) Youth leaders gathering cash for events the evening of the event
7) Treasurer's carrying the offering in the trunk of their car for several days
8) Keeping large amounts of money in the treasurer's home because it was a long week-end and turkey was being served so the company could not be kept waiting?
9) Having the same people count the money every week rather than rotating counters and failing to keep track of who did the counting because no signatures were required on tally sheets
10) Many people have access to the safe including the former tellers and treasurer.
11) Using designated funds for general fund purposes
12) The failure of having receipts for every expenditure -- just to name a few
Tough Questions Make for Clear Thinking When it Comes to Church Funds
- Do we count and record MONEY immediately after they are received? Every minute that the money sits around uncounted is a moment providing a temptation to steal.
- Is MONEY always kept in a secure place?
- Do we count our cash and cheques twice for accuracy? To err in addition is human. But the more we check our work, the more we develop careful accounting habits and avoid careless accounting mistakes.
- Do we place MONEY in lockbags (money bags provided by the bank requiring a key to open) or the special sealed envelopes (also provided) after counting?
- Do we place the lockbags or special envelopes in a safe or a night depository until the bank opens?
- Do we strictly limit who has access to the safe?
- Do we change the safe combination when someone is no longer authorized to use it?
- Do we make sure that the same person is not involved in more than one of the financial procedures of the church (collecting funds, counting them, recording the giving, authorizing expenditures, writing the cheques, auditing the account)? The more access a person has to the various procedures, the greater the ability to misuse funds.
- Persons authorized to write cheques against church funds, are they held responsible through an accounting/auditing system?
- Do we provide the bank with annual updates of persons authorized to sign cheques against any account associated with the church?
- Do we issue annual receipts for giving?
Policies and Procedures Check Personalities and Maintain Integrity
Churches that are not guided by policies and procedures are vulnerable to being misguided by personalities. An opportunist is quick to spot an opportunity. Good financial policies, however, have multiple benefits: they protect not only the institution but also the individual, not only from temptation but also from accusation.
Here are some considerations you might like to make with your finance committee or your boards -
- Never allow for pre-signed cheques
- Expenses should be documented
- Never pay expenses out of cash offerings.
- No cheques should ever be written for cash amounts. Cheques written to CASH cannot be justified in an audit. There's simply no way to document where the funds went.
- Avoid mingling funds. Designated monies form a trust and they need to be handled separately.
- Secure authorization for use of funds for special purposes. If the pastor or staff use church funds to help purchase a home, for example, make certain a written agreement is drawn up, and secure official board and/or congregational approval for such a transaction. It should be defined in advance whether those funds are to be repaid upon termination of the pastoral relationship or upon sale of the home. ( A word of caution is in order, however. The church should always consult a tax authority to determine how exactly to set up such funds legally.)
- Every dollar that is taken in by the church must go through the church books.
Conclusion
Remember, what you do today to understand how monies are handled in your church may preserve a ministry as well as a person. The last thing you want is to have your congregation dwindle, or someone turn from their faith. The church may talk about money; however, does she know how to handle it? This may be more significant to the spiritual destiny of people in your community than meets the eye.
