Financial Red Flags and Proactive Practices

Financial dishonesty can happen anywhere. Churches and ministries are especially susceptible to issues of financial dishonesty involving theft from ministry accounts. Regardless of the size of your ministry, it’s always important to be aware of “red flags” and take steps to promote financial accountability at your church or ministry including the following: 

Red Flag One: The one man show. Try to avoid having the same person count, record and deposit the money each week. Instead, split the responsibilities between more than one person approved to handle money on behalf of the ministry as a check and balances system.

Red Flag Two: The lone counter. Leaving one person in a room to count the money creates temptation. Carefully select two qualified people to collect and count the money in a secure room. Conduct a background check on each of the individuals you select. Don’t allow the money counters to bring in bags, purses, or briefcases while they count.

Red Flag Three: The charismatic do-gooder. Don’t assume that the person handling the money is trustworthy just because they enthusiastically do the record keeping and rarely require assistance. Instead reconcile bank statements by having the treasurer or another high-level person compare each month’s bank statement with the church’s records on tithing and deposits.

In addition to keeping an eye out for these red flags, consider these additional tips for minimizing financial fraud in your ministry.

Hold money meetings.  Organize monthly meetings with church leaders to analyze financial statements. When everyone is up to speed on the church finances it is easier to spot inconsistencies.

Put a policy on paper. Document your church’s or ministry’s policy in writing to ensure consistency and eliminate the excuse of ignorance from a dishonest member.

Do your homework. Perform annual background checks and run annual credit reports on the people responsible for church funds. It might feel awkward, but individuals in charge of money need to be above reproach.

Require annual external audits. Bringing in someone from the outside to do an audit may help eliminate biased opinions on church finances.

October 28, 2020
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Tags: coverage, protect, liability, damages, youth
October 1, 2020
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March 31, 2020
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March 6, 2020
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Tags: missions, insurance
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Tags: ACA, IRS
July 3, 2019
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Tags: firework safety
June 28, 2019
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Tags: church payroll, finance, IRS regulations, paying employees, tax code
May 5, 2019
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Tags: protect, damages, weather emergency
April 30, 2019
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Tags: risk management, liability, health safety, protect, measles
April 9, 2019
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Do you use commercial vehicles that transport more than 15 passengers or carry cargo from one state to another as part of your ministry? If so, you are required to register with the Federal Motor Carrier Safety Administration (FMCSA) and obtain a USDOT number.

Tags: auto insurance, vehicle safety, liability
June 1, 2018
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The National Safety Council has designated June as National Safety Month, so we want to make sure your ministry is doing everything it can to protect its people, property, and programs. Each week in June, we’ll tackle a different topic. Up this week: Emergency Preparedness.

Tags: disaster prep, fire prevention, lightning, medical emergency, medical team, storms, weather emergency
April 18, 2018
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There’s a new scam in town, and ministries and other organizations collecting donations are the primary target. If your ministry collects tithes or donations, you could be targeted by scammers practicing donation overpayment fraud.

Tags: finance, fraud, donations, cyber security
February 21, 2018
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Tags: Billy Graham
February 9, 2018
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Tags: health safety, risk, protect, health, flu
June 19, 2017
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Tags: youth, insurance, safety
June 7, 2017
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Tags: mission insurance, foreign travel, coverage, liability
May 24, 2017
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Tags: auto insurance, loaning vehicles
March 29, 2017
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Tags: claims, coverage, insurance, property