Local churches often times put full financial trust in one individual – the “Finance Person”. This person’s role is to oversee and manage the church’s finances in an honest, upright manner that is worthy, exercising good stewardship in the spending of the church’s resources.

One of our client’s came to us at a time when the long-standing treasurer announced retirement. HarQuin started our normal onboarding process – understanding the current process of the exiting treasurer and gaining access to all accounts. Our first red flag was that the treasurer wasn’t using any kind of accounting software. The treasurer had everything entered into a spreadsheet and created financial statements also in excel spreadsheets. As HarQuin got started and began to reconcile the church’s bank and credit card accounts, it quickly became evident we were dealing with a lot bigger issue.

While the church’s monthly financials had always been very well presented (both in appearance and in bottom line), there were many holes and numerous instances of funds being misallocated, to the point of blatant embezzlement. The church leadership as well as the church members had no idea and were devastated. It was apparent that essential internal controls and procedures were missing, paving the way for temptation to escalate into actual misconduct. The absence of internal oversight and external accountability makes it alarmingly simple for a local church to succumb to the chaos and damage caused by negligent management and poor stewardship.

HarQuin successfully presented the findings to the church leadership in a kind, professional, and Christ-like manner. HarQuin recommended changes to the church's internal processes to prevent future embezzlement or misallocation of funds. By managing payroll and bookkeeping, HarQuin provided the church with sound financials, accurate and reliable payroll procedures, and timely financial reports at a fraction of the previous cost. Although it was a difficult and disappointing situation for the church leadership, it was also a testament to the beauty of God's love, repentance, forgiveness, and grace within the church.

Key takeaways

• Accountability is crucial – avoid placing someone in a situation where their integrity might be questioned. It's important to safeguard the reputation of your brothers and sisters in Christ.
  

• Separation of Duties - No single individual should be responsible for both spending the church's resources and producing the financial statements. It is essential that every member of the organization is subject to checks and balances.

• Transparency - Stewardship failures manifest in various ways, such as using church funds for personal purchases, making unnecessary acquisitions for the ministry, or outright theft. Ensuring transparency through outsourced bookkeeping provides objective financial data, free from emotional influence.