How You Can Prevent Embezzlement
1. Hire the right people. Do a thorough background check on each employee and volunteer who will have access to the church’s funds. Criminal background checks cost very little but can show any prior criminal convictions. Conduct reference checks.
2. Do not let volunteers handle money if they are new or unknown to the local congregation. [Main Story]
3. Divide duties. No one person should have access to all the steps in the handling of money or accounting for funds or the expenditure of funds.
4. Have a good recordkeeping system. Insist on up-to-date accounting records. Never pay vendors without documented invoices. Have a third party review all suppliers being paid, to determine that they are legitimate companies who are providing actual goods and services for money.
5. Have clearly defined levels of approval for expenditures and for signing checks.
6. Have an independent third party do audits. At the local church level the conference treasury staff usually does this.
7. If you suspect a problem, do not wait. Contact your local conference treasurer. The conference has access to resources, including the General Conference Auditing Service, to assist.
Things to watch for in your employees and volunteers ?who have access to money and accounting systems:
1. Financial need. A bad economy or personal financial difficulties can cause individuals to make bad decisions. An employee frequently requesting advances may be the sign of a bigger problem.
2. Employee dissatisfaction. Employees who feel underappreciated or overworked may feel justified in bad financial behavior.
3. Close relationships with vendors and service providers.
4. Odd behavior. Employees or volunteers who are reluctant to have someone review their work, or who are unwilling to take vacations or let someone else handle their financial activities even during a short absence.
5. Employees or volunteers who appear to live beyond their means.