Church Accounting, Auditing, and Protection
by EUGENE H. COBAUGH Principal, Miami Office
Presented before the Miami Chapter of The Institute of Internal Auditors—June 1962
IN RECENT YEARS many instances of embezzlement have arisen in business. Fortunately, not many flagrant examples of embezzlement
have occurred in churches, but this is not because of lack of opportunity, for many church accounting systems are grossly inadequate.
Too many times pastors, congregations, and councils take the position that the spiritual atmosphere surrounding churches precludes
the necessity of treating their practical affairs as a business matter. No approach to this question could be more unrealistic, for many millions of dollars are being contributed each year in churches throughout the country. Therefore, it follows that anything less than a well-planned, adequate system including proper controls is depriving the church of the kind of financial stewardship it is entitled to receive. It is of course easier to talk about installing such a system than it is actually to do it.
Where does the pastor fit into this financial picture? Usually, he finds that the greatest part of his effort must be directed toward the spiritual growth of his congregation and that he must relegate to a secondary place the attention he might otherwise give to administrative
and accounting matters. Bearing this in mind, we can readily understand why the responsibility then rests on the shoulders of the Board or Council to see that adequate stewardship of financial matters is maintained.
How can the duties of stewardship best be discharged? Many times the problem is simply a matter of fixing responsibility. In the area of counting the collection and preparing the deposit, some people have been known to become offended when the advisability has been suggested of having two persons present at all times until the deposit of the funds has been completed. Too many times church members take the position that if a member is elected to Council, is conscientious, and devotes his time, efforts, and resources to the business of the church, then it should follow that these controls are unnecessary. It is indeed unfortunate that they do not understand and realize that there exists a direct correlation between fraud and loose controls.