Stealing from God

A new study indicates that theft of church funds is shockingly common. The problem is too much trust creating opportunities for temptation and sin

January 21, 2007|By Joe Burris | Joe Burris,sun staff

The Second Epistle to the Corinthians says that those who give to the church must do so willingly and freely, for "God loves a cheerful giver."

Yet even the most generous contributor might turn tight-fisted after discovering that the person entrusted to collect contributions to the church is often also the one who takes them to the bank and files the financial statements.

And that often leads to widespread embezzlement.

Even in church, temptation and opportunity can lead to shocking levels of sin.

Just ask the authors of a recent study by researchers at Villanova University. They found that 85 percent of Roman Catholic dioceses had discovered embezzlement of church money over the last five years - with 11 percent suffering thefts of more than $500,000.

Entitled Internal Financial Controls in the U.S. Catholic Church, the report concluded that most Catholic dioceses leave themselves open to theft because they trust the same volunteers or employees to handle both assets and financial records.

The study adds that because churches have small accounting departments, their employees often have little supervision by a qualified financial manager. "A fundamental tenet of internal accounting controls," says the report, "is to keep the financial record-keeping duties separate from those individuals that have access to assets, especially cash."

And since external auditors focus on financial statements of the diocese, they have been less likely to detect theft at parishes.

"I was so taken aback; it had never occurred to me that there would be such embezzlement," said Charles Zech, director of the Villanova church finance research center and co-author of the study, which focused solely on the Roman Catholic Church. Zech said that of the 174 United States dioceses petitioned to participate in the study, 78 responded voluntarily, with most reporting incidents of theft.

"To my knowledge, with any denomination the underlying problem is the same - too trusting," said Zech. "No one thinks that a minister or priest will embezzle. No one thinks a volunteer will embezzle."

But they will, as the Archdiocese of Baltimore and other church organizations have discovered.

In June of 2004 Victor George Puotinen pleaded guilty to two counts of felony theft after stealing nearly $443,000 from the archdiocese and the Basilica of the National Shrine of the Assumption of the Blessed Virgin Mary. Puotinen worked for Archdiocesan Central Services before moving to the basilica, where he handled parish administrative services.

Two years ago, Janice C. McIntosh, then principal of Glen Burnie's Arthur Slade Regional Catholic School, pleaded guilty to taking more than $60,000 over a decade from the fundraisers and other accounts at the school.

The Catholic church isn't alone when it comes to embezzlement: Ellen Cooke, former treasurer for the Episcopal Church, stole $2.2 million from the church's Manhattan, N.Y., headquarters in 1995.

Two years ago, Judith Lynn Anderson, business manager at First United Methodist Church of Waukesha, Wis., was sentenced to two years in prison for stealing $250,000 in church funds.

Ron Durham, pastor of Abundant Life Church in Bangor, Maine, pleaded not guilty after being indicted on charges of stealing more than $100,000 in church funds two years ago.

Robert David Keith, pastor of the Warren Hill Missionary Baptist Church in North Little Rock, Ark., was indicted by a grand jury on charges of stealing $11,000 from the church two years ago.

Churches "put too much faith and trust that people will do the right thing and don't believe they will do the common thing," said Zech, who added that churches that allow parishioners to handle money need to put safeguards in place without worrying about offending those workers.

"It's not that you don't trust them," he said, "you must protect yourself."

Well before it experienced the recent embezzlements, the Archdiocese of Baltimore was working toward doing a better job of protecting itself. It is in the final stages of implementing an ethics hot line that will give parishioners who suspect improprieties a means to report their suspicions.

Sean Caine, spokesman for the archdiocese, said the ethics hot line has been two years in the works, having been tested on the Archdiocese of Chicago.

He said the suggestion was made to use such a vehicle during an annual bishops conference on fiscal oversight in 2004.

"We began looking into a contractor that others who currently have it were using, how much it would cost and what was the cost versus savings," said Caine.

He added that the hot line was implemented in part because church officials believe the federal Sarbanes-Oxley Act that establishes ethics standards for U.S. company boards (it was passed in the wake of the Enron scandal) will eventually be expanded to apply to all nonprofit organizations as well.

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