How to Make Sure Your Church is Handling Money Correctly

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Here's a story of a treasurer of the Lower Susquehanna Synod of the Evangelical Lutheran Church in America who helped himself to quite a bit of money that didn't belong to him:

Since 1991, leaders of the Harrisburg-based [ministry] had assumed that millions in endowment money was going to missionary work overseas and to pastors in need of financial assistance. Barry R. Herr, the synod's treasurer for 28 years, was responsible for making sure it did.

Instead, police and church officials say, Herr funneled more than $1 million into a bogus bank account, transferred it to his personal account and used it to buy classic cars.

This brings up a good question -- how do you make sure your church is handling its money correctly? My suggestions:

1. Find out if your church's books are audited each year by an outside accounting firm. Our church does this and has had a clean bill of (financial) health for over 20 years now.

2. Look over the books. Our church open up the church's books for all members to review. I'm sure no one does (I haven't ever), but it's good to know I could if I wanted to. Maybe I will check them out this year and let you all know what they contain (not specifics, of course.)

3. Attend the annual meeting and ask questions. Once a year, our church has an annual business meeting where the finances are reported on and questions are allowed. If you want to know something specific, this is a great time to find it out.

4. Know your leaders. This is the key, though it's not fool-proof either. But if you know the pastor and the main staff members, you should have a good feel for their honesty/integrity. Then again, stories abound where people say "I never would have guessed that he would have done that," so you can still be burned by being too trusting.

Overall, if you do all these things and something bad happens (like a guy takes $1 million of it and buys cars), I wouldn't worry about it. Sure it's ok to feel bad and think what good that money could have done. And it's certainly right to prosecute the thief (though you should forgive him). But I'd look at it this way: my gift was to God anyway, not to the church. The second it left my hands, the gift was transferred to God and served its purpose. Even if the money was misused somehow, the original intent for its use was fulfilled.

What's your take on the issue? Have you ever faced an issue like this?

Comments

[Laura]

My congregation has its books open. Every month we review the budget and vote on any changes.

[Mrs. Micah]

Solid advice. The outside audit is critical. It's very sad, but it seems like it's easy to steal money from a church if you seem like a trustworthy person.

[Ken Clark - CollegeSavings.About.com]

Great article...

Perhaps the most precarious part of the ministry finance, is that minister's struggle for so long.

It is easy for minister's to develop an "entitlement mentality" when finances finally become solid for a ministry.

Accountability (to and people who know finance / accounting) is key!