Separation of duties:

Imagine a shepherd putting a wolf in charge of caring for and inventorying his sheep.  Would you trust his numbers?  Most likely he would have a fat wolf and no real idea of how many sheep are really in the fields!

The shepherd would lack “separation of duties” in this scenario, and possibly “separation of sense” as well!

It is imperative that ministries utilize separation of duties to deter theft from within and build trust with donors. This practice involves dividing responsibilities and tasks among different individuals to reduce the risk of errors and fraud.   

Think about a volunteer bookkeeper who counts offerings, makes deposits, and then records the amounts into the books every Monday morning.  What would happen if someone claimed they gave $200 but the bookkeeper had only recorded $100?  What defense would the bookkeeper have?  None.

What would you do if you were the pastor? Was it a simple mistake or did theft occur? 

Separation of duties would have provided checks and balances that might have prevented fraud and protected the bookkeeper.

Here are some key areas to consider for separation of duties:

Authorization: One person should not have the authority to approve financial transactions on their own. For example, a pastor may approve a purchase order, but a different person should authorize the payment.  This ensures that purchases are made legitimate for the ministry and not personal in nature. This is particularly true of credit cards and reimbursements. 

Recording: The individual who records transactions in the accounting system should not be the same person who handles the actual cash. This ensures that records are accurate and tamper-proof.

Reconciliation: Regular reconciliation of accounts should be performed by someone whois not involved in the day-to-day handling of transactions. This helps to identify discrepancies and potential fraud.

Review and Audit: Independent reviews and audits should be conducted to ensure that financial duties are properly separated and that controls are effective. Internal audits can help identify weaknesses in the system and suggest improvements.

It’s easy to think things like, “We’ve always done it this way” or “I just don’t have enough help to separate duties.”  You might regret those thoughts when faced with an accusation of wrongdoing. 

Protect your ministry by asking one of your board members or dedicated congregants to step up and give a little time each week to help protect you and your church. 

Don’t put yourself in a place where you look like you might you might look more like a wolf instead of a shepherd.