Pass the Plate Please: A Study of the Un-Saintly Embezzlement and Misappropriation of Church Funds

• In Event: Fraud/Forensic Accounting

Abstract

An increasing number of cases of fraud and embezzlement at churches have been reported by the popular press and there is good evidence to suggest that a primary reason for these defalcations may lie in a lack of internal control lapses in enforcement of existing controls. Churches appear to be particularly vulnerable to fiscal abuse, given the large amounts of donations and collections that are received in cash. A pilot survey is conducted to evaluate procedures that exist in sixteen local churches located in New York and Michigan. Results of the pilot survey identify specific weaknesses that exist within the local church’s internal control structure. Based on the findings, suggestions are offered as to the steps that churches may take in order to improve their internal control systems and thereby improve the organization’s financial reporting, strengthen the safeguarding of assets and minimize the misappropriation of church assets.

Authors

• Ryan Thornhill, Ernst & Young LLP

• Madeline Domino, Mercer University

• Carmelita Troy, Andrews University