In our previous article, “Easter and Church Finances Part 1” we considered Judas’ position as the keeper of the money bag, his theft and betrayal of Jesus.
This article explores how this can happen and what we can do to reduce the risk of theft and misappropriation of funds.
How does this happen now?
Two major reasons why misappropriation of church and other organisations funds occur, are:
- Human sin
- Lack of effective financial management
Human Sin
Even good and well-meaning people are tempted. Small misdemeanours, “borrowing’ of small amounts of money can slowly grow and, the amount becomes too difficult for the thief to replace the missing funds. At the same time, like the ‘frog being cooked slowly’, the severity of the situation may not be discovered until it is already very significant and often the perpetrator has already departed.
Jesus said:
27 “You have heard that it was said, ‘You shall not commit adultery.’ 28 But I tell you that anyone who looks at a woman lustfully has already committed adultery with her in his heart. Matthew 5:27-28
I believe this alarming statement is to reveal the beginning of the sin. Left unchecked, there is risk that adultery may result – sooner or later.
Similarity with money, a small, seemingly insignificant act can lead to a disastrous end.
For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. 1 Tim 6:10
“No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money. Matthew 6:24
Certainly the love of money is a major issue for people!
Christian organisations are gullible
Christian organisations are not immune from the risk of theft and misappropriation of funds. I believe that Christian organisations are often more at risk than other non-Christian organisations. During my almost thirty years working with churches I have learnt that Christians are more likely:
- To believe that all people in the church are basically honest and will therefore believe;
- what people tell them about money
- that people will do what they say they will do with money
- that people will not misuse church funds for personal gain
- Not to want to offend people and therefore:
- avoid asking and/or pursuing proper documentation
- avoid investigating a potential misappropriation of funds
- avoid investigating potential incident where someone does not follow church policies and procedures
- To under-value the importance of financial management, or stewardship as it has traditionally been called, of church financial resources and consider it less important than other areas of ministry
- To think that the tasks involved in financial management are easy and therefore anyone with some administration or banking skills can perform the tasks
- To give the treasurer job to anyone who offers
- Resist paying for professional financial management services
The result is an environment that is “ripe for the easy picking’ by well meaning and not so well meaning people.
A friend and work colleague who previously held the position of CFO of a large Christian organisation used to spend much of his time dealing with financial misappropriation in churches and other Christian-based organisations.
Luke 16:10
“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?
Managing money certainly reveals one of the key factors in a person’s true character.
The aims of effective financial management
The main aims of effective financial management are to:
- reduce risk of:
- misappropriation of funds
- inefficient use of funds,
- the effect of major corrections
- increase the credibility, reputation and integrity of the organization – which in turn enables the organisation to attract more funds
- assist in achieving the goals of the organization by increasing the efficiency of the use of funds
Therefore, the lack of effective management will:
- increase the risk of:
- misappropriation of funds
- inefficient use of funds,
- the effect of major corrections
- decrease the credibility, reputation and integrity of the organization and funds
- divert resources from achieving the goals of the organisation by reducing the efficient of the use of funds.
The main areas of effective financial management include:
- Well-developed and approved budgets in place well before the year begins including:
- Profit & Loss
- Capital Expenditure
- Cashflow
- Rolling 5 year plans and budgets:
- Capital and larger expenditure items
- Profit & Loss
- Cashflow
- Regular and frequent financial reporting against the agreed budget
- Annual audit or review by suitably qualified and experienced 3rd party professionals
- Suitably qualified and experienced people performing the bookkeeping and accounting functions
- Use of a recognised and supported accounting system
- Leadership/management team trained to understand financial statements and take appropriate followup actions
- Agreed and documented policy and control procedures that are followed, especially around:
- The control and management of Cash
- Payment approval Delegation levels
- Large value purchases
- The leadership should ensure that the financial management and those involved with the financial management of the church are valued and acknowledged along with other ministries.
In the end, not only did Jesus die, but the lives of the disciples and the believers were affected. In the end, Judas was so remorseful that he threw the money into the temple and hanged himself. This may have been avoided by having effective financial controls in place.
Of course, God did have another plan and purpose for Judas’ betrayal.
God does want us to plan
Jesus said “Suppose one of you wants to build a tower. Will you not first sit down and estimate the cost and see if he has enough money to complete it?” Luke 1:28
It is wise to budget and plan before any money is spent.
We learn from the story of Joseph that God wants people to plan, save and prepare for the future.
In both the story of Joseph and our own experience we have trusted God and seen Him turn that which was meant for evil for good. This does not excuse us from being diligent in the management of the financial affairs that we are entrusted.
Raising the Standard of Financial management of our churches is a continual process.
Building strong financial management enables a strong financial foundation for the growth of the church which is in addition to the spiritual and pastoral foundations.
Easter reminds us of a potentially disastrous effect of the mismanagement of money. The death of the church as the custodians of the money!
Please contact us if you would like to discuss the financial management of your church at [email protected] or 1300 138 627
© Benkorp Management Services Pty Ltd 2018