What’s the Problem?
You want to handle your church plant finances with utmost integrity. But sometimes expediency or a situation that may feel like ‘necessity’ lures planters into sloppy financial practices.
Do you want to be able to assure supporters & local givers that their investment in the Kingdom is being put to best use? You’d better have the chops to back it up.
Doug Lawrence gives us a painful case study in his blog post:
This is how we spend our money…
This is the really dangerous [claim] and perhaps the most prone to exaggeration and abuse. People of good will and strong character mess this up all the time. Here’s a case in point:
Mark (absolutely not his real name) talked about being scrupulously honest about every penny spent by the church on his and his family’s well-being. The number was significant, but rather far from the reality.
It turned out that various discretionary funds, some of which he controlled, were adding to his package approximately half again as much money. This is a fiction no pastor can afford, and in this case, cost the pastor his job when the accurate number was broadcast on the local news.
The truth is, every church needs an unbiased and accountability-protected internal auditing system which keeps everyone honest—all the time. Discrepancies, half-truths, and borderline fraud need to be identified early and made right immediately. This process should be followed by an outside audit every year.
Small church? Can’t afford to do it? You can’t afford not to!
What to Do
Have a CPA perform a church plant financial audit every year. Seriously. It will cost you at least $1,000 in most cases, but will keep your house in order.
If you think you can’t afford that, then at least hire an accounting firm to do a ‘Financial Review’, which should include at least:
- Confirming standard practices & proper money handling are in place
- Reviewing bank reconciliations
- Reviewing any checks the bookkeeper made payable to themselves
- Reviewing reimbursements made to staff
- Reviewing bank deposits, at least one from each calendar month
A Review should cost more like $500 and will be worth every penny.