April 2026

Help Prevent Embezzlement Cases

Embezzlement cases have been increasing in the news, and this includes in our churches. Let’s close the temptation gap by establishing clear separation of duties for all individuals who play a part in serving a church’s financial duties. We recently had two situations in Central Region. One of those unnamed churches (case is still being litigated) had a bookkeeper who did not attend the church. A new treasurer had been appointed, and as he began to look at the financials, the balances did not line up.  Within a few hours of looking at bank statements, financial reports, and QuickBooks entries it was obvious that monies were missing. The church leadership reported this case to the police department and charges were filed.

Lessons learned:

• The bookkeeper had authority to transfer funds from one account to another.
• The bookkeeper could withdraw funds at the bank.
• The bookkeeper’s financial reports did not align with the bank statements.
• The bookkeeper completed transactions that weren’t approved by the board.
• The bookkeeper did not record all bank transactions in QuickBooks.

Most of the fraudulent transactions were unauthorized bank transfers from one account to another, unapproved cash withdrawals, and fraudulent transactions recorded in QuickBooks.

Embezzlement is much more difficult if the following checks and balances are followed:

• Those who write checks should NEVER be a signer of checks.
• There should be a clear separation of duties so that several people are involved in the process rather than just one individual.
• Online banking provides full access to one person which creates more risk.
• Two people must sign off on all requisitions for payments.
• Cash withdrawals should not be practiced. Write a check to the individual.
• Treasurers should be double-checking the work of the bookkeeper and making sure that offering sheets match deposits, checks have proper requisition paperwork, and the bank statements match the figures in QuickBooks.

The bottom line is we often give too much trust and not enough accountability. We have prepared Financial Guidelines for Local Churches that speak to creating a good system for better accountability. You can download that article here.

A $4,000 Lesson:

We often hear about businesses or churches experiencing cyber breaches and think, “Good thing that isn’t me.” If you’re a pastor or church treasurer reading this, consider this your warning – it can happen to you. Our church was using PayPal for online giving when one day we checked the bank account and discovered $4,000 had been siphoned out overnight. The hacker did a real good job by locking us out of our own PayPal account. Every credential was changed. Every security question reset. To this day, we still have not been able to get back into our account.

We are grateful that the Lord was our defense. Our local bank refunded the church the full $4,000, which was a total answer to prayer. PayPal still has not given us access to get back into our account because this hacker locked us out and changed all the account credentials.

Our bank put a security protection on our account so even if our PayPal was compromised, the bank will not allow any transaction with PayPal to ever take place again. While this protected us, it also meant we had to find a new solution immediately.  The solution for our church was Tithely. Tithely is a free software to use for secure online giving. We have received the best customer service and transparency.

Our church is being proactive in every way possible to prevent our church finances from being hacked. Another solution we chose is to have two separate bank accounts – one set up to receive inbound tithes and offering from Tithely and the second bank account as the main account with all our church finances. Every week, Tithely will automatically deposit the giving received into bank account number one. And then our bank will transfer that online giving into bank account number two.

The philosophy behind this was that if the hacker wasn’t in our PayPal but rather in our bank account, he would have been able to take every dollar our church has. So, the two-part bank account system mitigates that risk and protects the large nest egg of finances for the church.

Don’t wait until this happens to your church. Be proactive now. Protect what God has entrusted to your care.

A Central Region Pastor