Monday, May 01, 2006

Financial Procedures at Church

A man in Overland Park, Kansas pleaded guilty to embezzling from his church. He took $297,000 from Central United Methodist Church, where he served as treasurer. Since most UM congregations have elaborate financial procedures requiring multiple signatures for the release of funds, how did he manage to get away with it?

Central United Methodist's policy required the trustees to approve all payments and each check to have two authorized signatures.

Koenigsdorf stole the money by taking blank checks that already bore a signature from an authorized signatory, adding his own signature and making the check payable to himself, and then depositing the checks into his law firm's operating account at Bank of America in Overland Park, Schlozman said.

Beginning in late February 2003, Central United Methodist stopped providing blank checks already signed by an authorized signatory, so Koenigsdorf began forging a second signature, Schlozman said.


The lesson from this story: never take shortcuts in church financial permission. Never, never, never.

5 comments:

Michael said...

I've often wondered how these guys manage to get so much before they are finally caught.

TN Rambler said...

You would think that folks would have learned by now to never under any circumstances allow proper financial procedures to be followed. No one who is permitted to sign checks should be permitted to reconcile the accounts and an anual audit of all financial records by a disinterested party are a must.

Church leadership has a fiduciary resposnsibility to the congregation to ensure that the money is handled properly and that the operation of the church is as efficient as possible.

Wayne

John said...

Even when everyone trusts each other, it's critical to still follow the procedures.

TN Rambler said...

oops...that first sentence should have read allow proper financial procedures to not be followed.

Wayne

Allen said...

A man in our District office in NW Arkansas had taken $355,000 before he was caught. I just wonder what goes throught a persons mind when it gets out of control like this.