Stealing from the Collection Plate

Fraud in Churches and Religious Groups

By Herbert Snyder, Ph.D, CFE; and James Clifton, MA, CPA, CFE

Churches and religious groups are at a greater risk for financial misconduct because of the nature of their missions and management structures. Here's how fraud examiners can help deter theft and the loss of a congregation's trust. 

It all started with a school field trip and an extramarital affair. The Reverend Alex Soames was a pastor for Campus Christian Services (CCS), a nondenominational college ministry supported by yearly contributions from community parishes.1 During spring break one year, CCS sponsored a religious retreat and Rev. Soames drove a vanload of students to a church camp in an adjoining state. Unfortunately, the pastor also took along a woman clearly not his wife, and, after dropping the students at their retreat, disappeared for a long weekend in the state capital.

Several of the students complained to the CCS's board of directors and an investigation began into Rev. Soames' activities. The inquiry subsequently uncovered missing funds, a second bank account into which he was funneling money, and child pornography on his personal computer. The unusual thing about this case is that the board only first examined the pastor's professional behavior (particular his handling of money) when his personal life strayed out of bounds despite the group's many questionable financial practices. And it seems likely, as long as he behaved himself publicly, that Rev. Soames would never have been investigated and would have run CCS into financial oblivion.

None of the CCS board members were lazy or uncaring about the group and certainly none of them were dishonest. Nor were the instances of financial misconduct particularly subtle. A subsequent examination of CCS's financial records, which were in considerable disarray, easily uncovered duplicate paychecks, large expense reimbursements checks with no documentation, and numerous other problems. So how then do situations like that in CCS arise and how do fraud examiners deal with them.

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