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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