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About The


May 30, 2007
Column #1,344
Advance for June 1, 2007
Protecting the Church Against Fraud
by Mike McManus

On May 8 Wendy Ann Thompson Morgan, 37, a daycare worker of First United Methodist Church in El Dorado, AR, was charged with fraudulent use of the church's credit card. Earlier this spring, her mother, Carol Ann Thompson, a 61-year-old former bookkeeper at the same church, was charged with stealing $692,629. .

This is not an isolated case. Two years ago, another El Dorado area United Methodist pastor pled guilty to misappropriating $201,000, such as altering 61 checks to himself. At least he paid the money back and is serving a three-year jail term.

Fraud has also plagued Catholic churches. Two priests in Del Ray Beach, Florida face grand theft charges for stealing a stunning $8.6 million from their church. Monsignor John Skehan, 79, allegedly embezzled the money over 40 years as pastor, to buy property. His successor used money for an "intimate relationship" with a  former bookkeeper at his previous church, and to gamble in Las Vegas.

More shocking to me is the case of Sister Barbara Markey, an internationally admired Ph.D. psychologist who created FOCCUS, the most widely-used  premarital inventory, taken by 500,000 couples a year.  I have known and respected her for a decade.

She was at the top of her career until a year ago when the Omaha Archdiocese revealed   that more than $300,000 was missing from the 2004-5 FOCCUS account, and turned the case over to police. She used some money to buy gifts for family members but reportedly spent most of it on casino gambling!

She has pled innocent but faces both a criminal trial in the fall and a civil suit by the Archdiocese to recover losses that are now estimated to exceed $800,000.

Nor are these cases rare. A study by researchers at Villanova University reports that 85 percent of Catholic dioceses responding to a survey had discovered embezzlement of church money in the last five years.

Two questions occur to me.

How could a bookkeeper steal nearly $700,000 over eight years without anyone noticing? Or a priest embezzle millions over a 40-year career and not get caught?

The answer is buried on the last page of the Villanova report: "Only three percent of the dioceses conducted an annual internal audit of their parishes. Nearly 14 percent responded that internal audits do not routinely occur but are triggered by a change in key personnel - either the pastor or parish bookkeeper. Twenty-one percent of the dioceses indicated that they seldom or never audit their parishes."

Apparently, no audit was conducted during Msgr. Skehan's 40 year term - only when he retired. Similarly, Sister Markey's books were not audited for years. Nor were those of the Methodist bookkeeper.

That is virtual permission to steal.

"As a faith-based organization, we place a lot of trust in our folks," said Chuck Zech, co-author of the study and director of Villanova's Center for the Study of Church Management.

"We think if you work for a church - you're a volunteer or a priest - the last thing on your mind is to do something dishonest. But people are people, and there's a lot of temptation there, and with the cash-based aspect of how churches operate, it's pretty easy," he told a reporter.

When asked if he trusted Gorbachev to live up to a treaty, President Reagan replied, "Trust, but verify."

The Omaha Archdiocese has belatedly learned its lesson.  According to Father Joseph Taphorn, Chancellor of the Archdiocese, a series of new internal controls and audits have been put in place.  For example, a new protocol for Sunday collections mandates that contributions be deposited by a person who cannot write parish checks (i.e., the priest). The audits revealed thefts in several parishes..  "Our goal is transparency," said Taphorn.

The Villanova study, "Internal Financial Controls in the U.S. Catholic Church," made several recommendations that are valid for Protestant as well as Catholic churches:

1. Annual internal audits of parishes, supplemented by external audits conducted at least every three years.

2. Establishment of a uniform budgeting process and standardized software for all diocesan entities.

3. Establishment of communication channels for church workers to report suspected irregularities or fraudulent activities while protecting their anonymity.

It is time for church leaders and members to ask some pointed financial questions: "When was the last time there was an audit of our church's books?  Was the audit performed by a friend of the pastor or someone appointed by the governing board? Were any irregularities discovered?

The commandment is, "Thou shalt not steal." Especially from a church!

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