Avoid financial mismanagement traps - Word&Way

Avoid financial mismanagement traps

By Mark Littleton

Many temptations lurk for those who handle the money in churches.

"I have heard of horrible stories of people in churches getting their hands into the money and stealing from the church," Brad Dixon, a Missouri Baptist Foundation regional vice president said. "It happens mainly whenever the person who is involved with counting or depositing money is also the person who handles recording all the giving people do.

"When you have just one person doing everything, you're bound for trouble."  

Handling money is a primary area of temptation for such people, and deadly for churches, especially smaller ones that don't have a retinue of volunteers or paid staff to cover this part of church life.  

Cheryl Kohlsteadt, administrator at Pleasant Valley Baptist Church, Liberty, doesn't see theft as the major problem.

But she added she believes much of the financial mismanagement that occurs in churches involves things like designated offerings that don't really go into the budgets for those particular concerns.

How does a church avoid these kinds of mismanagement? Dixon feels a potential theft problem is fairly easily circumvented by assigning different people to varying parts of the money-handling process.

"You safeguard it by having a division of labor. No single person ever does more than one job," he said.

"The more people you have doing different jobs, the less opportunity for the temptation to steal. It's the best form of checks and balances."  

Kohlsteadt agreed. "Put in checks and balances so that there's more than one person overseeing the finances of the church," she said.

Utilizing several staff or volunteer positions can help create an effective oversight program of financial resources, regardless of church size.

Although some software is available to help, "your software is only as good as the people behind it," Dixon noted.

Kohlsteadt recommends the National Association of Church Business Administration. "They have many resources. They're all very inexpensive," she said.

Pleasant Valley uses the Rex Friece Library, available through the organization. (07-13-06)

(This is one of a special section of stories regarding church insurance and finances in the July 13 issue. See the print edition for information on electronic giving and safety issues and for tips on reducing insurance rates.)