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How to protect your worship center from financial fraud

By Mary Carder, Integrated Marketing Specialist on March 12, 2020

Claire Eastin was an active member of Life Community Church in Paso Robles, California. She had worked as the church’s office manager since 2006 and was a trusted figure among senior leadership. In 2018, Eastin left on sick leave, handing over her bookkeeping duties to another staff member.

As the staff member reviewed the records Eastin kept, it became clear that there were discrepancies. The employee reported the irregularities to church leaders. When confronted, Eastin admitted to embezzling nearly $300,000 from the church and was fired.

For months afterwards, the church debated whether or not to report Eastin’s crimes to the police. After her termination, Eastin made attempts to pay back stolen money – albeit slowly – setting aside portions of her paychecks. Was prosecution really necessary?

As one church elder put it, “It was very hard on the church to have to go public with this failure on our part to see the embezzlement for so long, especially from someone we trusted so deeply.”

Their inaction isn’t unique. Reports estimate between 80-95% of financial fraud within worship centers goes unreported. This uneasiness with reporting enables criminals to move from one house of worship to the next, allowing them to continue their crimes unchecked.

Pastor Newsome and the other leaders of Life Community Church didn’t want to give Eastin that opportunity, so they eventually brought the case to the local district attorney’s office. “We felt a responsibility to the public to do that,” Newsome said.

Eastin pleaded no contest to two counts of grand theft by embezzlement. She was sentenced to over two years in prison and ordered to pay the church restitution of $177,577 – a little more than half of what she had stolen over six years.

While Eastin’s sentencing will be where the media leaves the story, Life Community Church, their members and surrounding community will feel the effects of her betrayal for years to come. As District Attorney Dan Dow stated, worship centers “work with our youth, assist the elderly, the homeless and serve in so many other ways that churches are uniquely equipped to do. A theft of this magnitude harms not only the church itself, but our community as a whole.”




The story of Claire Eastin is just one example of financial fraud within a religious organization. Unfortunately, worship centers are especially vulnerable to internal fraud. So much so, that estimates put the annual amount stolen in the billions.


What is it about worship centers that puts them at greater risk for financial fraud?

There are cultural, organizational and even legal reasons that contribute to a worship center’s vulnerability.



Houses of worship tend to place high levels of trust within individuals with very little oversight.



Worship centers usually “lack the financial controls necessary to expose – and prevent – fraud.” They often rely on volunteers or offer little compensation to employees, narrowing the pool of qualified candidates to handle finances. Lack of compensation also sets up a rationalization to steal, one of the corners of the fraud triangle (but we’ll get to that later).



Finally, religious organizations are tax exempt and not required to file financial information with the IRS. This means that embezzlers have one less point of oversight to dodge.


Why do employees steal?

Industry experts point to three conditions that enable people to steal: pressure, opportunity and rationalization. These are referred to as the fraud triangle.



Pressure is the motive for the crime. From gambling debts to credit card bills to simple greed, embezzlers have their own reasons for skimming from the top.



We’ve touched on this briefly above, but rationalization can manifest in other ways. The embezzler justify the theft, calling it “just a loan” they intend to pay back later. Or they might tell themselves they plan to use the money for noble purposes.



If there is any point where a single individual has control over funds, their management and documentation, then there’s opportunity for fraud. It could be that only one person counts offerings from the collection plate or maybe the same person has control of a credit card and authorizes purchases.


What can worship centers do to protect against fraud?


Hire the Right People – and Enough of Them

If you were hiring for a position in your center’s daycare, you would want to make sure applicants had the proper training and a clean record. Similar standards should be used for those watching over the organization’s money. Run background and credit checks on potential candidates, even if they are volunteers.

Entrusting one person with multiple financial duties is too risky. It’s best to have at least two, unrelated people share bookkeeping duties. (It’s so important that we’ll be mentioning it more than once throughout this article.) Have multiple people involved throughout the financial process, from collecting and counting donations to receiving invoices and paying accounts.


Have a Written Financial Policy

A written financial policy is the foundation for sound fiscal procedures and preventing fraud. Your financial policy should map out processes from a top-level perspective, outlining who is involved and how much authority they hold. However, it shouldn’t get bogged down with details.

To help clarify what we mean, consider these two examples from

“All checks shall be processed by two or more people as soon after the worship services as is practical.”

“Checks are processed by Remote Deposit Capture on Monday morning by 11:00 am.”

The first only states what is truly important to safeguarding finances – two or more people must process all checks, and checks must be processed as soon as possible.

The second, while seemingly more solid because it has more details, could cause more problems than it solves. What happens if the Remote Deposit Capture app is down that day? When should deposits be made if Monday is a bank holiday? These unanswered questions can create confusion. Rather than try to create instructions for every possible scenario, it’s better to keep your financial policy focused on the basics.

There are common scenarios that should be addressed in any religious organization’s financial policy. These include:

  • Purchases above a certain amount (ex. $500)
  • Contracts with third-parties
  • Conflicts of interest
  • Restricted or donor-designated funds
  • Storing financial records

Again, keep the policies surrounding these brief and limited to answering the following questions:

  • What’s the general procedure?
  • Who is involved and what are their roles?
  • What documentation is needed?
  • What are the consequences for failing to follow the policy?

After drafting a financial policy, your house of worship should run it by a CPA and an attorney to see if anything should be added or changed.


Perform Regular Audits

Claire Eastin’s theft from Life Community Church spanned six years, and may have gone on for even longer had she not been forced to take sick leave. Without regular audits and checkpoints, financial fraud can go undetected for years. Of cases reported, embezzlers were able to go unnoticed for an average of 18 months before their crimes came to light.

There are two primary ways to establish checkpoints to help detect fraud. The first is to hire a CPA to perform annual audits on your organization’s financial records. With tight budgets, many religious organizations might bristle at the cost of hiring an outside agency, but CPA fees are a fraction of what they could stand to lose from undetected fraud.


Have Internal Controls in Place

To help detect fraud in the 11 months between audits, your worship center will also need to set up internal controls. This is where having multiple people involved in the financial process becomes vital. Without a second or third pair of eyes monitoring the flow of funds, the potential for fraud increases and the chances of detecting it decrease significantly.


What are some internal controls worship centers can use to prevent and detect fraud?


Separation of Duties

Expenses should be approved by someone without spending or signing privileges. Allowing the same person to have authority to sign checks and approve expenses reduces oversight and transparency.

If multiple people with varying levels of authority have spending privileges, a financial chain of command should be established. The Evangelical Council for Financial Accountability (ECFA) uses the following examples of expenditures and approvals:

  • The CEO (Executive Director, President, Senior Pastor) must be required to submit his or her expense reports and credit card statements to the Chairman of the Board for approval (perhaps subsequent to payment), later to be verified by the external auditors during the annual audit field work.
  • The CFO (Controller, Senior Accountant) must be required to submit his or her expense reports and credit card statements to the CEO for review, also to be verified by the external auditors.
  • Any senior managers with expenditure authority must have their expenses reviewed by someone in authority over them.


Allow volunteers and staff to be trained in different departments and areas of the financial process. This enables duties to be shared and rotated. Once several people are properly trained, implementing mandatory vacations or rotating schedules builds regular checkpoints for internal account reviews.


Reconciliation of Accounts

Similar, and in some ways related to the separation of duties, reconciling accounts properly ensures transparency, while limiting the opportunity for fraud. To help keep a clean paper trail, have credit card and bank statements mailed to someone within the organization without spending or withdrawal authority over the account. Have invoices paid and deposits made in a timely manner, with records of both on file.


As pillars of the community, worship centers have more to lose than just money when it comes to fraud. Embezzlement can threaten the reputation, effectiveness and vitality of a religious organization. Help protect your house of worship by setting up policies and procedures designed to break the fraud triangle and expose theft.

Mary Carder, Integrated Marketing Specialist


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