Churches will oftentimes have limited funding and need to depend on volunteers to serve in the key roles of the church. If you make small improvements with precautionary measures against fraud, they can go a long way in preventing theft of assets or uninhibited spending. When it comes to fraud for non-profit organizations, these are the most common types, and church insurance will not always cover it.
First, always send your unopened bank statements to an employee without the authority to sign checks. Why? Let's look at the case where a small church's bookkeeper started using the church funds to pay for their personal living expenses. The bookkeeper did not necessarily go into it planning to siphon church funds, but because they started rationalizing the behavior, it became more and more of a habit. He hid the theft for months before the church caught onto it, and by then, they had lost thousands of dollars.
Second, increase your control over credit card spending. All churches have used credit cards for different purposes, and you want to nip inappropriate spending. To do this, create a system where someone will be responsible to check the credit card statements each month. You will need to verify the balance and that the payments have been made. In addition, check to make sure that old credit card accounts have been closed. Another common issue is with terminated employees: Make sure that they still do not have access to church credit cards.
Preventing fraud becomes as important as good church insurance. While insurance can protect you, you still need to review spending habits to make sure that unaccounted spending does not take place. Churches have sometimes lost hundreds of thousands of dollars to fraud that could have been prevented with the right precautionary measures. You never want a single person documenting all the church spending because this can result in funding being directed to the wrong account. Power without a system of checks and balances can corrupt the best of people.
Call Pachuta Insurance Today @ 706-769-2262
Source:
Church Insurance Management
First, always send your unopened bank statements to an employee without the authority to sign checks. Why? Let's look at the case where a small church's bookkeeper started using the church funds to pay for their personal living expenses. The bookkeeper did not necessarily go into it planning to siphon church funds, but because they started rationalizing the behavior, it became more and more of a habit. He hid the theft for months before the church caught onto it, and by then, they had lost thousands of dollars.
Second, increase your control over credit card spending. All churches have used credit cards for different purposes, and you want to nip inappropriate spending. To do this, create a system where someone will be responsible to check the credit card statements each month. You will need to verify the balance and that the payments have been made. In addition, check to make sure that old credit card accounts have been closed. Another common issue is with terminated employees: Make sure that they still do not have access to church credit cards.
Preventing fraud becomes as important as good church insurance. While insurance can protect you, you still need to review spending habits to make sure that unaccounted spending does not take place. Churches have sometimes lost hundreds of thousands of dollars to fraud that could have been prevented with the right precautionary measures. You never want a single person documenting all the church spending because this can result in funding being directed to the wrong account. Power without a system of checks and balances can corrupt the best of people.
Call Pachuta Insurance Today @ 706-769-2262
Source:
Church Insurance Management
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