(This article, first posted in November 2011, deals with an ongoing issue for our churches. Feel free to print and distribute or to forward.)
This week, an ex-con spoke to business students at Tulane University to tell them how to cook the books.
Okay, he warned them against cooking the books.
Aaron Beam served HealthSouth as chief financial officer until eight years ago when the shenanigans of CEO Richard Scrushy became public and that company dissolved into bankruptcy. For his part in the doings, Beam served three months in prison, a brief time to be sure, the result of assistance he gave the feds in their case against the boss.
Beam’s message should resonate with every pastor and leader of the Lord’s churches across our land. I have a strong suspicion that a large percentage of congregations do not know what their church’s actual financial situation is, the pastors do not know either, and the record-keepers–bookkeepers, treasurers, however they are known in the various churches–are either in over their heads or have developed their own system which only they understand.
What percentage of churches are being victimized by unscrupulous treasurers and bookkeepers? No one knows. But I venture to guess that the ones we hear about are merely the tip of the iceberg.
The culprit, if there is one, is poor leadership. The problem lies with those at the top.
In our denomination, and I expect most others, if state leadership organizes and promotes a conference dealing with church finances, it has one aim and one aim only: generating more money. “How to encourage our people to tithe.” “How to get our people to put the Lord’s work in their estate-planning.” That sort of thing. (See David Hankins’ welcome comment at the end where he corrects me. Dr. Hankins is the Executive Director of the Louisiana Baptist Convention.)
The financial conference I would attend, one I’m betting every pastor in the land would fight to get in on, would be titled: “How to cook the church books: How to recognize when your church is being ripped off.”
And what would such a conference tell us? Here are eight principles (actions, points) which the people in my and yours are desperately in need of, right now, today:
1. Show me how people have cheated the church.
In his Tulane lecture, Aaron Beam cautioned the college students to “stand by your beliefs or fall into the trap.” I’m tempted to wax eloquent (what the kid called “wax an elephant”) on the question “What beliefs?” because not everyone has solid moral principles to guide them in life. We can safely say that accused child molesters like Coach Sandusky of Penn State acted consistently with what they believed; the problem is what they believed was dead wrong.
According to the article, Beam’s boss lusted to be the richest man in the country and lived as though he already were. Beam admits to cowardly caving in to pressure from the boss to make the finances lie, leaving Wall Street with a false impression about the health of HealthSouth.
But I want to know how he cooked the books.
How can we be on the alert for the shyster among us if we don’t know where to look and how to recognize their activities?
In nearly a half-century of ministry, I have vivid memories of pastors telling how their associates stole large amounts of money from their churches. My brother, a pastor in Birmingham for decades, had it happen by a trusted leader.
So, seminar leaders, there is your assignment. Show us how to cook the books.
2. Tell us how to rotate leadership.
Small churches especially tend to have ingrown, unchanging leaders. The treasurer has been keeping the books for a generation or more, and his father before him did so. A young pastor who tries to change that system must have a death-wish.
So, how is it done? Has anyone ever pulled it off and lived to tell about it? Bring them before us for this seminar.
3. Show us how to make the money-counting, bill-paying, and record-keeping foolproof.
When I went from pastoring churches to administering the office of the local Baptist association, the first thing I did was to bring in an outside accounting firm to study how we manage the money from the churches and to make recommendations.
I wanted to institute annual audits. The chief accountant talked me out of that. It was too costly, time-consuming, and unnecessary. What you need, he said, was an annual “review.”
Among the changes they suggested were the person who writes the checks cannot sign them and the monthly bank statements should be opened first by the pastor, not the financial secretary.
I went them one better. Each quarter, in a meeting of our administrative committee, we opened all the books. I wanted these leaders to see every check that had been written, to know why it had been issued and why, and to have their questions answered. It will not surprise readers to know they had no questions.
Answering questions before they are asked is always best.
4. I want to know how to determine whether a volunteer is trustworthy enough to count the offering.
One would think this would be ridiculous, that in the church of the Lord Jesus Christ we would not be concerned with men and women stealing money from the offering plate. In a perfect world, maybe.
Recently, after a masked man tried to rob a group of people at church, the pastor was interviewed by a television reporter. “Pastor, doesn’t it shock you someone would try to rob people in the Lord’s house?”
“Not at all,” said the man of the Lord. “My people steal from God all the time.”
I suggest that in assessing the trustworthiness of a volunteer for handling money we a) open the record books to see if the individual is a regular, faithful, consistent contributor to the church, and b) check to see if they are faithful to the Lord in the usual ways we expect. (If they resist opening their record of contributions, that is all the information you need. No one who is faithful minds being found out as faithful.)
Jesus said, “He who is unfaithful in little things is unfaithful in much. And the person who is unfaithful in money cannot be trusted in dealing with the true riches in life.” (My paraphrase of Luke 16:10-11)
5. If someone is found to be cooking the books, what should be the leadership’s first steps?
We have to be careful here. We are dealing with what a friend calls “the fine China of human lives.”
A pastor of a small church with which I am familiar noticed one evening at the conclusion of a gathering that the church treasurer had left the checkbook in the room. Since he was now the only person in the building, the pastor took the opportunity to satisfy his curiosity and flip through the book. What he saw unnerved him.
The treasurer–an older gentleman with many friends in the congregation, a man who had held the office for decades–had been making out checks to his wife on a regular basis, as though she were an employee of the church. The preacher knew no reason and the book showed no documentation for this.
The pastor pulled in two other leaders, a man and woman in whom he often confided, and shared the findings with them.
They had no idea what to do. If there were good reasons for what the man had done, but if he was humiliated and his reputation besmirched, the little church stood to lose half its membership.
No one teaches pastors what to do in such situations. A seminar could attempt to do that.
6. And what if the culprit is the pastor himself?
Now, I have never known of a church where the preacher signed the checks himself. So he has to have an accomplice, an Aaron Beam to whom he is Richard Scrushy, intimidating the underling to do his bidding.
In the last month, I’ve heard of a pastor doing just that: ordering the lady who worked under him to write checks for his daughter who was at school, pay for questionable expenses of his own, and issue checks to people no one ever heard of but without proper documentation.
In political life, people go to jail for such. In church, we are torn between law and grace, whether to turn them over to the courts or let them quietly resign and leave the church.
I used to tell our church’s bookkeeper, “Susan, if I ever ask you to write a check for which you have a question, don’t write it. Get back to me, and if my answer is not satisfactory, call the chairman of the financial committee.”
I reminded her that she was responsible for the checks she wrote.
7. Should embezzlers be turned over to the law or should this be kept quiet?
That question, you will surely know, was one which the president and officers of Penn State faced when dealing with reports of a coach assaulting children on their campus. They decided the reputation of the university took precedence over the welfare of the children, and swept it under the rug.
As with most pastors, I’m of two minds on this.
Part of me sees this as a heinous crime–the very idea, stealing from the Lord!–which should be punished to the maximum. Throw the book at ’em.
On the other hand, the culprit–I’m thinking of one in particular now–will tell how her husband lost his job, her mother is facing massive bills for cancer treatments, and such.
What should we do? We need some help on this. Perhaps pastors who have been through it can speak at such seminars. Or lawyers with experience.
8. Tell us how churches can stay eternally vigilant in these matters.
Crooks are inventive. Find a way to shut down their operations today and they will create new ones by sunrise.
Situations change, personnel changes, pastors come and go.
These days, with many churches dealing with millions of dollars every year, they need structures in place for training money-handlers and constant training for anyone assigned with overall responsibility in this area. The IRS is always morphing their regulations, which requires someone from the church to stay on top of these things.
Outside consultants are best for training the top leadership. Then, the church’s key leadership can train volunteers in the congregation how to handle money responsibly and problems to watch out for.
Last Wednesday night, many of us from our New Orleans church traveled to Hattiesburg, Mississippi, to take part in a service held by our denomination’s International Mission Board in which 77 new missionaries were commissioned to take the Lord’s gospel to the world.
That takes money.
In fact, someone reminded me that it was only in the last four or five years that money for new appointees was not available. So, sending out such a large new contingent of workers is a great victory.
And where does the money come from? From the churches. And the churches get the money from you and me.
That’s why this is such a critical subject. The salvation of untold numbers throughout the world demands that we handle God’s money with integrity.
Moreover, it is required in stewards that one be found faithful (I Corinthians 4:2).