Internal fraud

It’s hard to imagine having money stolen by a church official or volunteer, but it is a risk and needs to be managed.

The good news is that our church policy offers protection against the risk of embezzlement. However, in order to meet the conditions of the policy and ensure that a claim can be defended, you need to comply with a number of safeguards.

• Cheques of more than £10,000 that need to be issued by the church should be signed by two authorised officials. 
• We strongly recommend that a second person checks any payments in cash to employees or volunteers. In particular, confirm the amount is correct. 
• Ask employees or volunteers who receive money on the church’s behalf to remit or deposit the money by the following day at the latest.  
• The church should issue a statement at least monthly to any business or individual that owes it money. The statement should be sent directly by post or email and not given to an employee or volunteer to deliver. 
• Carry out regular reconciliations of bank statements, cash-in-hand, and petty cash. These checks should be conducted by someone who is not usually responsible for this area so that theft cannot be concealed. 
• A sensible precaution is to insist that any employee or volunteer responsible for finance, ordering goods, or computer operations takes a two-week uninterrupted break at least once a year. Any hidden transactions are likely to come to light during this period. 
• Have stock and materials such as stationery, IT equipment or cleaning products checked at least annually by someone who is not usually responsible for this duty.  
• When ordering goods, two different people should be involved in the process – one to order the items and a second to record their delivery and authorise payment. This ensures that orders placed by the church are valid and that the goods are actually received. 
• External auditors should examine church accounts every year. 

Following these guidelines and being vigilant will significantly reduce your risk of fraud, as well as improve the general management of church finances.