Part 2 of our series on Segregation of Duties. In our recent Fraud Survey, we asked churches to respond to this statement:

“From the time of collection to the time of the bank deposit, funds are never, even for just a few minutes, in the custody of a single individual or kept in an unsecured location.”

Survey results – More than 65% of the respondents stated that this is true for their church.

Cash Flow Systems

To avoid fraud, it is of paramount importance that a church has a clear understanding of both of its cash flow systems: inflow (cash receipts) and outflows (cash disbursements).

We recommend that churches, at least once a year, flow chart these two cash flow systems.  To help in this process, we suggest they compare their cash flows to the flow of water through the church’s plumbing system.  What they should be looking for are any points along the way where one person, by themselves, can turn on a cash flow “faucet”.  One of the overlooked phrases in this question is “even for just a few minutes.”

KEY: We are talking minutes, not hours – that’s all it takes for fraud to occur!

To illustrate this point consider what happened at one church.  At this particular church one usher serving the balcony, removed all of the cash from the offering plate and stuffed it in his shirt as he made his way down two short flights of stairs.  In this case we are talking seconds, not minutes!