Stealing from God

A new study indicates that theft of church funds is shockingly common. The problem is too much trust creating opportunities for temptation and sin.

The Second Epistle to the Corinthians says that those who give to the church must do so willingly and freely, for “God loves a cheerful giver.”

Yet even the most generous contributor might turn tight-fisted after discovering that the person entrusted to collect contributions to the church is often also the one who takes them to the bank and files the financial statements.

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And that often leads to widespread embezzlement.

Even in church, temptation and opportunity can lead to shocking levels of sin.

Just ask the authors of a recent study by researchers at Villanova University. They found that 85 percent of Roman Catholic dioceses had discovered embezzlement of church money over the last five years – with 11 percent suffering thefts of more than $500,000.

Entitled Internal Financial Controls in the U.S. Catholic ChurchPDF file, the report concluded that most Catholic dioceses leave themselves open to theft because they trust the same volunteers or employees to handle both assets and financial records.

The study adds that because churches have small accounting departments, their employees often have little supervision by a qualified financial manager. “A fundamental tenet of internal accounting controls,” says the report, “is to keep the financial record-keeping duties separate from those individuals that have access to assets, especially cash.”

And since external auditors focus on financial statements of the diocese, they have been less likely to detect theft at parishes.

“I was so taken aback; it had never occurred to me that there would be such embezzlement,” said Charles Zech, director of the Villanova church finance research center and co-author of the study, which focused solely on the Roman Catholic Church. Zech said that of the 174 United States dioceses petitioned to participate in the study, 78 responded voluntarily, with most reporting incidents of theft.

“To my knowledge, with any denomination the underlying problem is the same – too trusting,” said Zech. “No one thinks that a minister or priest will embezzle. No one thinks a volunteer will embezzle.”

But they will, as the Archdiocese Of Baltimore and other church organizations have discovered.

In June of 2004 Victor George Puotinen pleaded guilty to two counts of felony theft after stealing nearly $443,000 from the archdiocese and the Basilica of the National Shrine of the Assumption of the Blessed Virgin Mary. Puotinen worked for Archdiocesan Central Services before moving to the basilica, where he handled parish administrative services.

Two years ago, Janice C. McIntosh, then principal of Glen Burnie’s Arthur Slade Regional Catholic School, pleaded guilty to taking more than $60,000 over a decade from the fundraisers and other accounts at the school.

The Catholic church isn’t alone when it comes to embezzlement: Ellen Cooke, former treasurer for the Episcopal Church, stole $2.2 million from the church’s Manhattan, N.Y., headquarters in 1995.

• Two years ago, Judith Lynn Anderson, business manager at First United Methodist Church of Waukesha, Wis., was sentenced to two years in prison for stealing $250,000 in church funds.

• Ron Durham, pastor of Abundant Life Church in Bangor, Maine, pleaded not guilty after being indicted on charges of stealing more than $100,000 in church funds two years ago.

• Robert David Keith, pastor of the Warren Hill Missionary Baptist Church in North Little Rock, Ark., was indicted by a grand jury on charges of stealing $11,000 from the church two years ago.

Churches “put too much faith and trust that people will do the right thing and don’t believe they will do the common thing,” said Zech, who added that churches that allow parishioners to handle money need to put safeguards in place without worrying about offending those workers.

“It’s not that you don’t trust them,” he said, “you must protect yourself.”

Well before it experienced the recent embezzlements, the Archdiocese Of Baltimore was working toward doing a better job of protecting itself. It is in the final stages of implementing an ethics hot line that will give parishioners who suspect improprieties a means to report their suspicions.

Sean Caine, spokesman for the archdiocese, said the ethics hot line has been two years in the works, having been tested on the Archdiocese of Chicago.

He said the suggestion was made to use such a vehicle during an annual bishops conference on fiscal oversight in 2004.

“We began looking into a contractor that others who currently have it were using, how much it would cost and what was the cost versus savings,” said Caine.

He added that the hot line was implemented in part because church officials believe the federal Sarbanes-Oxley Act that establishes ethics standards for U.S. company boards (it was passed in the wake of the Enron scandal) will eventually be expanded to apply to all nonprofit organizations as well.

The archdiocese is working with Ethics Point, a governance, risk and compliance vendor based in Portland, Ore., to implement the new system, which will enable parishioners to either call an 800 number or go online to report suspected irregularities.

“Letters went out a couple of weeks ago letting people know that it was coming on line, and it should be up within a couple of weeks,” said Caine. “Prior to that, there have been long-standing policies and procedures that are always being tweaked to try to address the issue.”

Those procedures include using rotating auditors, assigning at least two money counters for each parish and barring the same two people from counting funds for more than three consecutive weeks.

“We’re constantly looking for ways to be transparent and diligent in maintaining resources,” Caine said. “Money is given for a specific purpose, and once that trust is breached, it’s obvious that your finances and your trust takes a downslide.”

The Episcopal Church took steps to protect itself after the Cooke controversy. “Within the last decade, the Episcopal Church has put into place pro-active procedures to assure judiciary responsibility at all levels of the church,” said Canon Robert Williams, the church’s communications director.

“After that experience, the diocese and congregations, in addition to the churchwide structure, have been increasingly diligent about implementing new forms of control of church funds.”

Meanwhile, the Baltimore Hebrew Congregation says that because of the way it collects funds, it is largely immune from theft problems.

For one, it doesn’t take collections during services. Nor does it take cash.

“I would say that 95 percent of the money we collect is done by check basis,” said Jo Ann Windman, executive director of the congregation. “We go through a process where checks are received and handled by three different people.

“Everyone sends in their donations by mail or drops them in our offices, usually in check format. Everyone has an account number, and they get a letter of contribution breakdown for tax purposes. It’s pretty cut and dry.”

Moreover, Windman says that the Baltimore Hebrew Congregation is audited by an independent auditor.

When the congregation conducts phone-a-thons, donations are made via check or credit card number. But the numbers are destroyed as soon as the information is tabulated. Such safeguards make sure that would-be thieves aren’t tempted in the first place.

“I think we have to give people the benefit of the doubt,” said Windman. “Fortunately, with the way we run our operations we are protected.”

The Villanova study offered ways the Catholic dioceses could protect themselves from embezzlement.

Among the recommendations: Establish fraud policies in every diocese; establish a uniform budgeting process and standardized software for all diocesan entities and submission of financial data by all parishes and high schools annually, if not more frequently.

Source

(Listed if other than Religion News Blog, or if not shown above)
Joe Burris, The Baltimore Sun, Jan. 21, 2007, http://www.baltimoresun.com

Religion News Blog posted this on Monday January 22, 2007.
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