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The first thing every church leader needs to understand (and believe) is that their church is not immune to financial misconduct. The "We don't need to worry about that here" mentality is the reason why so many churches become victims of embezzlement. Even if your church isn't being victimized (that you know of), implementing a system of internal controls will ensure that your finances aren't at risk in the future.

Richard Hammar offers these examples of how embezzlement occurs in his book Pastor, Church & Law, Vol. 2: Church Administration and Property:

Example. A pastor had the sole authority to write checks on the church's checking account. He used church funds to pay for several personal expenses, amounting to thousands of dollars each year, until his actions were discovered.

Example. A church left its Sunday offering, along with the official count, in a safe in the church office until Monday. On Monday morning a church employee deposited the offering. The employee ignored the official counts, and deposited the offering less loose coins and currency (which she retained). The deposits were never checked against the offering counts.

To avoid these scenarios, here are a few basic principles for implementing internal controls:

Even if you trust every leader at your church, you probably don't feel comfortable giving all of them a copy of your house key—or access to your bank account. Even if you trust them completely, there's no reason to provide such unlimited access to your possessions. In the same way, no one should be given unlimited access to the church's assets.

Internal controls are like checks and balances—or an accountability system. Not only do internal controls make your church's finances safer, but the knowledge that your church has a system in place will also serve as a deterrent—removing the temptation for a leader to embezzle or to "borrow" funds temporarily.

A system of internal control not only protects your church's assets, but it protects church leaders from unfounded accusations. If a church leader is wrongfully accused of embezzlement, he will be glad the church's internal controls have made such a charge impossible.

So not to offend anyone, emphasize that the changes have nothing to do with any individual. Rather, the changes are necessary for ensuring the financial security of the church in the present and future.

At first the new practices might seem inconvenient, but in the end, your leaders will be less susceptible to false accusations. And they will understand that you have the church's best interest at heart.

Documenting internal control policies is a vital step. This communicates that you are serious about implementing these practices, and it will encourage your leaders to abide by the new restrictions—even if they might seem tedious or unnecessary.

In addition to implementing a system of checks and balances, and limiting access to accounts and cash supplies, churches need to consider finding a local CPA to perform an annual audit of their finances.

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