About a tenth of Protestant churches has experienced embezzlement, survey shows

A recent survey conducted by LifeWay Research has found that about one in 10 Protestant churches in America has had someone embezzle funds.

The survey of 1,000 Protestant senior pastors has found that nine percent have witnessed embezzlement of funds, while 91 percent said they are not aware of any incident.

LifeWay executive director Scott McConnell said that the figure is not surprising as most churches rely on volunteers to handle their finances. He also noted that most volunteers are honest, but churches often lack systems to catch dishonest workers.

"Churches run on trust—but they also know people are imperfect and can be tempted," McConnell said, according to Christianity Today. "That's why safeguarding a church's finances is an important part of ministry," he added.

The survey findings indicated that pastors of mid-sized churches, or those with between 100 and 249 members, are less likely to say funds had been embezzled (six percent) than those with 250 or more members (12 percent).

The results also showed that 16 percent of Churches of Christ ministers are likely to say their church had funds embezzled. On the other hand, only seven percent of Baptist pastors and six percent of Presbyterian/Reformed pastors are likely to say the same.

A previous study conducted by the Association of Certified Fraud Examiners found that 2.4 percent of 2,400 fraud cases at businesses and nonprofits involved churches or other charitable groups and had an average loss of $82,000.

In the LifeWay study, the pastors were asked when their church's financial books were last audited and how much cash were in the reserves.

Forty-seven percent said that their church had a complete audit in the last year, while 66 percent said their church's books had been audited within the last four years. Ten percent of pastors said that the most recent audit was more than five years ago. Another ten percent said that their church's books had never been audited, and 14 percent said they do not know when their church last had an audit.

Other findings indicated that Methodist pastors (74 percent) are most likely to say that their church had a complete audit within the last year. Baptist (17 percent) and Pentecostal (18 percent) pastors are more likely to say that their church had a complete audit more than five years ago, while Lutheran (three percent), Methodist (four percent) and Holiness (four percent) pastors are less likely.

McConnell further noted that most churches realize that having an audit can be a good thing. "It's helpful to have a second set of eyes look at the church books," he said.

He said that it is not surprising to find that some churches have few reserves, noting that an earlier study has found that about a third of churches have struggled to make their budgets.

"It takes a lot of faith to run a church, especially when finances are tight," said McConnell. "But some churches may be missing out on ministry, because there's not enough money in the bank to respond to needs and opportunities that arise," he added.