Ex-Pastor Found Guilty In Embezzling $1M From Chur

[geekette]

Originally Posted by coadie

Our church requires 2 signatures on checks. There may be a minimum on this. Like someone taking a check under 50 dollars and signing it for supplies purchases. A bank will tell a pastor some internal control steps. You don't have to pay a CPA 90 dollars an hour for every little suggestion.
Another step is vacations. Does someone in cash handling leave on vacation a week or 2 and a different person cover the responsibility. In embezzlement, the perp often never leaves.

Yep, which is why, on the bank side, you're required to take one vacation of a certain length every year. If there's anything hinky going on, it should show up. This might not be a bad idea for pastors, bookkeepers, etc.

[CC1]

In this case one of the things I find weird is that this pastor had to know this was going to come out eventually. You can't sell a piece of property for $900,000 telling the folks the proceeds are going towards a new church then spend all the money on other things!

[ManOfWord]

Originally Posted by CC1

In this case one of the things I find weird is that this pastor had to know this was going to come out eventually. You can't sell a piece of property for $900,000 telling the folks the proceeds are going towards a new church then spend all the money on other things!

The annual business meeting financial reports were falsified (the pastor made and presented them) so the people thought the money was there.

[ManOfWord]

Let me say this: Just so no one thinks I have ill feelings in this situation. It's sad and I wish it had not happened. I don't wish a day of prison on this man. He was like my brother.

However, those of you who may be reading this thread and still run your churches in this manner had better take heed. Even if you don't spend the money on yourself other than your fair salary. If you have total control over any account in your church and even can prove that not a penny was spent on you personally, the IRS considers it income and you're liable for the taxes on that amount.

If you don't have a "wall" between you and the finances, you're just setting yourself up for trouble. People really have no problem trusting someone who treats them with full disclosure. It's when things are secretive that it's not good.

[coadie]

Originally Posted by ManOfWord

Let me say this: Just so no one thinks I have ill feelings in this situation. It's sad and I wish it had not happened. I don't wish a day of prison on this man. He was like my brother.

However, those of you who may be reading this thread and still run your churches in this manner had better take heed. Even if you don't spend the money on yourself other than your fair salary. If you have total control over any account in your church and even can prove that not a penny was spent on you personally, the IRS considers it income and you're liable for the taxes on that amount.

If you don't have a "wall" between you and the finances, you're just setting yourself up for trouble. People really have no problem trusting someone who treats them with full disclosure. It's when things are secretive that it's not good.

In accounting there should be no co mingling of assets or accounts.

[Cindy]

This happens when there is no personal integrity or accountability. I have heard of this happening, and the church doors were chained and locked by the authorities. And what about his wife and other family members. Did they know what was going on? Church members, other preachers? Did no one wonder where he got the money for all those things?

[pelathais]

Originally Posted by ManOfWord

I couldn't agree more, AB! I was never personally mistreated in any way in all my years of association there.

I will say this, that there is a leadership paradigm, in the UPCI, which teaches by example that the pastor has sole control of everything. There are very little, if any, checks and balances in the local church. This is dangerous even for good men. It has been propagated for decades and has been the downfall of far too many pastors.

The fear is that church boards will control the pastor's preaching/teaching etc. Servant leaders never have to fear that. I pray for him and fear for him at the same time.

Just from reading the news article I'm left wondering exactly what it was that he did that was so different from just about every other UPC pastor I've ever known. If he failed to declare the money as personal income on his own tax statements then there'd be a lot of trouble, but building a "pastor's pool" with church funds is hardly unheard of.

[NotforSale]

There are so many variables to this problem of where money is spent, and how it is spent. In my opinion, the biggest variable would be Church size.

Large Churches have much more cash flow and laity to take care of financial responsibility, allowing for good decisions to be made by others, not the Pastor. If someone moves away, the resource of people to fill the gap is available. I know Churches that have an endless supply of piano players, so no worry if the current piano player leaves.

Small Churches, where membership may linger in the 20's or so, just one family moving away can sting the Pastor if he is relying on Tithes or Offerings to help support him financially. Not only that, what if 2 families leave, and they both had considerably good jobs?

This can leave a Pastor not only in a financial bind; he may lose half his Church Board or Trustees members. I've seen this one example personally; the Pastor told the Church he would use 5000.00 acquired from a local electrical company, wanting to use the property boarder for power line access, as a start for a new building fund. This Church was very small, and intention was sincere. Within 2 months, the Congregation lost 9 members, and, an economic slump hit the area.

Within this 2 month period, the financial picture of this Church changed entirely. New Board Members were needed, Trustees were gone, and cash flow was almost cut in half. Needless to say, the 5000.00 was used to sustain the Church and the Pastor, where membership was hovering around 14 people.

Also, within this scenario you have new people who are now in place, who may leave a Pastor feeling uneasy when it comes to exposing the financial picture to them, as a relationship of trust has not been developed. No offense, but just because people go to a Church, doesn’t mean they are able to attend to financial decisions. Some people can't even pay their own bills.

I don't know the whole story behind this Pastor who apparently embezzled this money, but sometimes exploiting this type of example can create a "Witch Hunt" towards other Pastors who’ve tried their best to do things the right way. There's the old saying: Don't judge a man till you've walked a mile in his shoes.

It doesn’t matter if you’re a Pastor or not, when a person is up against the ropes financially, the stress can be insurmountable, especially in a small Church. I currently Pastor a small Church, and I wish I could just hand over the books to someone. My wife is the Church Secretary, only because of the turnover in our area. I’m also not comfortable in signing any Church checks, and would only do so in an emergency.

[ManOfWord]

Originally Posted by pelathais

Just from reading the news article I'm left wondering exactly what it was that he did that was so different from just about every other UPC pastor I've ever known. If he failed to declare the money as personal income on his own tax statements then there'd be a lot of trouble, but building a "pastor's pool" with church funds is hardly unheard of.

That is a HUGE problem. It is how most UPCI young men are taught/learned to handle church finances. It was how I did it until I found out about IRS laws about 20yrs ago!

Originally Posted by NotforSale

There are so many variables to this problem of where money is spent, and how it is spent. In my opinion, the biggest variable would be Church size.

This was not a large church by anyone's standards. Larger maybe, than the average, but not by much. The church I pastor is prob 2 or 3 times the size this church was and he lived WAY above the average person and even top wage earners there.

Let me also say this, he really did serve the people and loved them. He could be counted on to be there when there was a need. I don't believe there was evil intent at all.

[Mr. Smith]

Originally Posted by ManOfWord

Let me say this: Just so no one thinks I have ill feelings in this situation. It's sad and I wish it had not happened. I don't wish a day of prison on this man. He was like my brother.

However, those of you who may be reading this thread and still run your churches in this manner had better take heed. Even if you don't spend the money on yourself other than your fair salary. If you have total control over any account in your church and even can prove that not a penny was spent on you personally, the IRS considers it income and you're liable for the taxes on that amount.

If you don't have a "wall" between you and the finances, you're just setting yourself up for trouble. People really have no problem trusting someone who treats them with full disclosure. It's when things are secretive that it's not good.

Yep, so true. I don't even sign on any of the accounts. I don't have a "Wall" between me and the finances, I have the Pacific Ocean and a couple of planets.