On stewardship of Church finances

Cherry Hill woman charged with theft from church

Excerpt:

A Cherry Hill school board member has been charged with stealing more than $70,000 from her church, where she served as treasurer, police said Tuesday.

Lynette Howard used First Baptist Church of Cherry Hill's funds to cover personal expenses, said Lt. Bill Kushina. She surrendered to police on Monday, a little more than three months after church officials filed a police report about financial discrepancies, he said.

She was released on a theft-by-deception charge pending an Oct. 27 court date.

Howard, 49, an active parent in the Cherry Hill school district, was elected in April to serve a three-year term on the township school board.

Reached on her cell phone, Howard, who lives on West Ormond Avenue, declined to comment.

Kushina did not release details on how and when the roughly $70,186 disappeared from the church.

Howard worked part time at the church after losing her job as a financial planner in January 2008, according to a 2009 story in the Courier-Post of Cherry Hill.

Howard was no longer serving as treasurer at First Baptist at the time of her arrest, Kushina said.

When a new person took over the duties earlier this year, church officials noticed financial discrepancies after they received copies of bank records, Kushina said.

Howard had joined First Baptist almost 20 years ago, said one member. Ken Giannone, chairman of the deacon board of the 50-member congregation, declined to comment Tuesday.

Comment: We used to live in Cherry Hill (when I was an assistant Pastor in Haddon Heights)

My own views of how churches should handle finances (presumes a congregational government)

• A church needs to have true separation of the receipts function (say a church financial secretary) and disbursement functions (church treasurer)
  
• An annual budget
  
• Monthly financial statements (at least for the leaders):
  
  • Income and expense statement
    
  • Budget vs expenses statement
    
  • Balance sheet
    
• Quarterly financial meetings where the membership is provided financial statements (mentioned above) and an opportunity to ask questions about the same
  
• Double signing required for checks (unless an online bill pay service is used)
  
• Annual independent audit of the financial statements
  
• Offsite backup of financial files (disasters happen!). A good solution to this is Quickbooks online. All the data is at the Intuit data center. They have a BCP plan (I checked for another organization on whose board I serve)
  
• Privacy of giving records (or can just about anyone see who gives what?). As far as I am concerned, only the financial secretary and perhaps that person's backup should have access to individual giving records
  
• Generally Accepted Accounting Principles (GAAP) should be followed
  
• Churches should follow the EFCA Best Practices for Churches (PDF)
  
• Organizations that ask the church for money (mission agencies, schools, etc.), should provide annual financial statements to the church. Church leaders need to request this data
  
• When money is requested (say for a thanksgiving offering) for a specific project
  
  • Funds should actually used for that project
    
  • Use of special fund monies should be reported back to the congregation
    
  • Example:
    
    • Special Christmas offering for replacing furnace # 2
      
    • How much will it be?
      
    • How much was received?
      
    • Was it really spent on furnace # 2?
      
    • How much was spent?
      

A church should have their own 501(c)(3) documentation. This can easily (and really fairly reasonably) accomplished via online legal services such as Legal Zoom.