For church leaders: “How to cook the books”

A few years back, an ex-con spoke to business students at Tulane University to instruct them on how to cook the books.

Well, okay, he warned them against cooking the books.

Aaron Beam served HealthSouth as chief financial officer until the shenanigans of CEO Richard Scrushy became public and that company dissolved into bankruptcy. For his part in the crimes, Beam served only three months in prison for the assistance he gave the feds in their case against his boss.

Beam’s message should resonate with every pastor and leader of the Lord’s churches across our land. Most congregations do not know what their church’s actual financial situation is.  Furthermore, 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 they alone understand.

Consider this a wake-up call.

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 is poor leadership. The problem lies with those at the top.

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 and recognize when your church is being ripped off.”

So, what would such a conference tell us? Here are eight principles (actions, points) which church leaders need, right now, today:

1. Show me how people have cheated the church in the past.

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 Richard Scrushy to make the finances lie, giving Wall Street a false impression about the status of HealthSouth.

I want to know how he cooked the books.  What exactly did he do?

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. We know it’s necessary, but tell us how to achieve it and still keep our jobs.

Small churches especially tend to have ingrown, unchanging leaders. The treasurer has been in charge of church finances for a generation or more, as his father before him did. A young pastor trying 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, my first act was to bring in an outside accounting firm to study how we manage the money from the churches and to make recommendations. Having pastored in that association for nearly fourteen years, I had never seen anything questionable in this office, but what I saw was a lack of information.  The director kept things to himself.  I did not want to do that, and wanted to set up a system of openness that would bless this work into the future.

At first, I asked for an annual audit. The chief accountant talked me out of that. It was too costly, time-consuming, and unnecessary. What you need, he said, was an annual “financial review.” So, we opted for that.

They suggested two changes for our small office: a) the person who writes the checks cannot sign them and b) the monthly bank statements should be opened first by the pastor, not the financial secretary.  We put those into effect immediately.

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. Transparency is golden.

4. I want to know how to determine whether a volunteer is trustworthy enough to count the offering.

One would think this would be unnecessary, 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.

When a masked man tried to rob a congregation, 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 with the true riches in life. (My slight 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 “the fine China of human lives.” When we accuse someone of wrong, their extended family and circle of friends are also affected.

A pastor of a small church noticed one evening at the conclusion of a gathering that the church treasurer had left the checkbook behind.  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.  (What they did was to quietly remove the man from that office, but without ever confronting him with their questions.)

6. And what if the culprit is the pastor himself?

I have heard of a pastor 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 the secular world, 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.

In my last pastorate, I would tell the 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 every check she wrote.  We never had problem one.

7. Should embezzlers be turned over to the law or should this be kept quiet?

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 embezzler–I’m thinking of one in particular now–will tell how her husband had lost his job, her mother is facing massive bills for cancer treatments, and that she took the money out of great need.  This does not make it right, but it will tug at the hearts of a lot of church members.

What should we do?  There is no one answer.  Each situation is different, and the wisdom of God is required.

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.  (After bad guys ripped off my bank account twice in two years, the banker told Bertha and me they deal with these same inventive, brilliant crooks all the time. They are forever inventing new ways to steal.)

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.

Where does the money come from to support our thousands of missionaries all over the world? It comes 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).

3 thoughts on “For church leaders: “How to cook the books”

  1. The easiest way to steal is to get the money before it goes to the bank.

    A few common sense measures will make it difficult to get the money out of the plate:

    1. Always have two eyes on the collection plate until the deposit is made.
    2. The deposit ticket should be in duplicate and signed by the counters ( at least two ).
    3. The deposits should be traced to the bank statement.
    4. The bank account should be reconciled by a person other than the ones making the deposits and writing the checks.

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