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Preventing Fraud in Churches: An Analysis of Segregation of Duties Implementation

Fri, April 20, 3:55 to 5:35pm, Hyatt Regency Greenville, TBA

Abstract

Despite the existence of fraud in churches, little research has addressed the level of internal control implementation in these entities. Internal controls, particularly the basic control of duty segregation, allow an organization to protect itself from employee fraud. This study attempts to determine the level of segregation of duties implemented in churches, as well as the relationship between the extent of duty segregation and the age and size of the church. A survey instrument was emailed to a sample of North Carolina churches, and the 44 usable responses were analyzed for deviations from proper segregation of duties. All churches reported some level of deviation, and were therefore susceptible to fraud. However, a statistically significant relationship was not found between the number of deviations and the age of the church, or between the number of deviations and the size of the church, measured by either annual giving or average weekly giving.

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