Reducing Fraud in Ministry – as the leader

Dr. Glenn Miller, host of the Leadership and the Church podcast, and CEO of Miller Management is getting the mic turned around on him this month as Chris Miller, President of Miller Management, gets to ask the questions.

Last week we talked about the inconceivable nature of Fraud in Ministry. We provided numbers and statistics that might have made your head spin a little. But ultimately, we will be better prepared when we stare these numbers in the face.

Three-legged Stool

In our findings of “Christian Fraud” these three things were present 100% of the time.

The first leg of the stool is called Outside Pressures. These could be gambling habits, shopping addictions, loss of spouse income, unexpected medical bills, etc.

Is the church responsible for this one? Probably not.

The second leg is called Rationalization. These could be thinking things like “I’m a volunteer but I should be getting paid for my work.” Or, “I should have received that promotion, not the other guy.”

Is the church responsible for this one? Well, we don’t want to feed the rationalization, but it’s mostly on the individual.

That brings us to the third leg, Opportunity. People usually don’t commit a crime unless they think they can get away with it. So with fraud, it usually starts out slowly and ramps up over time. The average fraud case in ministry takes about three and a half years to be discovered; and the average loss is around $80,000.

Is the church responsible for this one? We think so. The church is responsible for instituting the policies and procedures – and enforcement – that will help safeguard the ministry.

“It’s about the position, the policies and procedures, not the individuals in those roles.”

Dr. Glenn A. Miller

Admin Audits

Surely having a Audit done would catch all fraudulent activity, right? Maybe, but maybe not. They can show you where internal weaknesses are, but any more than that might not be in their engagement letter. Make sure you know what you are buying.

Now, you might be thinking, we are a Christian organization and we employ Christians. Does this really apply to us?

Best Fraud Prevention Tactics

The #1 fraud prevention technique is the tone at the top. Does the leadership care about the details and stewardship? What about financial integrity? If there is a lack of integrity at the top, that will trickle down.

As an individual, don’t be afraid to ask questions. Get into the details during that finance meeting. If you don’t ask the questions, that’s when things can slip through the cracks.

What does the bible say?

Luke 17: 1-3 – We don’t want to create stumbling blocks, or put temptations in front of people; just because we aren’t disciplined enough to put proper controls into place.

James 5:19-20 – The church should be a model of stewardship. Stewardship means more than just keeping records. We need to take proper care of receiving and spending of God’s resources.

By having good internal controls, and good systems, we are caring for our people. Temptation is going to come. But if we have systems that catch us before it gets too far, we are really caring for folks better.

Coming Up

Join us next week when we share the top ten issues from cases we have worked and how you can protect your own church by these examples.

Join the conversation, see behind the scenes, and learn more on our Instagram and Twitter.

Special thanks to our guest host and master of all things podcasting, Chris Miller, for this second episode in our Reducing Fraud in Ministry series.