6 Ways to Minimize
Fraud in Your Ministry

Most churches still receive cash and check donations during their gatherings, whether through a passing plate, a giving box, or a drop-off envelope system. Every step of that process, from collection to deposit, carries risk if only one person is involved.

We recommend that two unrelated people count offerings together immediately after they are collected. They should use a standard offering count sheet that records each check donation individually, the total cash received, and the overall giving total. Designations should also be noted. Both individuals should sign the sheet, and a copy should be retained for your records before funds are deposited.

Transparency is one of the most effective deterrents to financial misconduct. When only one or two people have visibility into the books, the risk of unchecked misuse increases significantly.

We strongly recommend that at least three people, ideally board elders, deacons, or finance team members, review monthly financial reports. This does not require deep accounting expertise. It simply means that multiple trusted leaders regularly ask questions, notice trends, and hold one another accountable.

It is common for pastors and staff to put church expenses on personal credit cards, often to accumulate rewards points, and then request reimbursement. While understandable, this practice creates serious risks.

The IRS requires churches to maintain a properly structured accountable plan for reimbursements. Without one, all reimbursements are treated as taxable compensation regardless of their intended purpose. Even with a proper accountable plan in place, heavy reliance on reimbursements makes expenses harder to audit, less visible in real time, and easier to manipulate.

The better approach is to use a dedicated organizational spending platform, such as BILL Spend and Expense. These tools give leadership real-time visibility into every charge, allow staff to attach receipts and notes directly to transactions, and create a clear audit trail. When a reimbursement is genuinely necessary, it should always be accompanied by a proper invoice or receipt, and the reimbursement check should be written and approved by someone other than the recipient.

Two of the most important protections a church can have are an outside accounting firm and a clear separation between who handles money and who verifies it.

Monthly bank reconciliations are a foundational internal control, but they only serve as a safeguard when the person reconciling is different from the person recording transactions or handling cash. When the same individual does both, errors and fraud can go undetected indefinitely.

This is one of the core reasons ChurchBiz exists. As an outside accounting partner, we bring a second set of trained eyes to your books each month. We review transactions, ask questions about unusual activity, and help ensure your records are accurate and reconciled. Our involvement naturally creates the separation of duties that protects your staff and your congregation. This does not guarantee that fraud cannot occur, but it significantly reduces the likelihood that it will go unnoticed.

One of the more common payroll fraud schemes involves someone emailing a church administrator claiming to be an employee and requesting that their direct deposit information be updated. If the administrator makes that change without proper verification, the next paycheck will be deposited into a fraudster's account.

The most effective protection against this is to remove the administrator from the process entirely. If you use QuickBooks Payroll, employees can manage their direct deposit information through QuickBooks Workforce, a secure, two-factor-authenticated portal that verifies identity before any changes can be made.

Many churches operate on informal understanding rather than documented procedures. Long-tenured staff members carry institutional knowledge in their heads, handshake agreements govern spending authority, and reimbursement expectations are communicated verbally. This creates risk not just from bad actors, but from honest confusion, staff transitions, and lack of accountability.

A written financial policy does not need to be complex. A clear, one-to-two-page document covering the following areas is enough to establish a meaningful foundation:

Having these expectations in writing protects your staff, your leaders, and your congregation. It also signals to donors that your church takes financial stewardship seriously.