When the Pastor Steals: Church Embezzlement and Board Oversight
- Michael Blevins
- Oct 15
- 2 min read
Churches and nonprofits run on trust. That’s exactly why fraud can hide in plain sight. When one person controls donations, bookkeeping, and reconciliations, it isn’t “helpful”. It’s high risk. Here’s how embezzlement happens, what boards miss, and a simple oversight checklist you can put in place this week.
A (very real) pattern we see
One person handles donations + deposits + accounting
Bank statements arrive to that same person
No second set of eyes on reconciliations
Board reports are summarized, not verified. Small gaps compound. Over months or years, “rounding errors,” “temporary loans,” and “cash-handling shortcuts” become six-figure losses that devastate ministries and community trust.
Red flags (that look like “efficiency”)
Consolidated control: same person records donations, makes deposits, and posts to the ledger
Missing documentation: deposit slips without batch summaries; no donor roll-up to bank deposits
Statement custody: bank statements routed to operations, not the treasurer/board
Vague reports: totals without detail (no variance to budget, no prior-period trend)
Resistance to oversight: “We’re too small for that,” “No time for double work,” “Donors wouldn’t understand”
The fix: split key duties. Even in small organizations. You don’t need a big staff - you need two people touching the high-risk steps.
Count & record donations: two people sign a batch sheet
Deposit by Person A; ledger entry by Person B
Bank statements go directly to the treasurer/board chair
Monthly reconciliation prepared by staff; reviewed & signed by a board member
Variance report to the board: actual vs budget, last month, last year
Annual external look: review or audit, fraud risk analysis
Board Oversight Checklist (printable)
Statements delivered to a board member (not staff)
Two-person donation count + signed batch sheet
Deposit-to-donor reconciliation (batch roll-ups tie to bank)
Monthly bank reconciliation with a board signature
Variance reporting with explanations of >10% swings
Policy on conflicts & personal reimbursements (with receipts)
External review/Audit annually or fraud risk analysis; rotate reviewer every 2–3 years
What to do this week
Reroute statements to the treasurer (physical + e-delivery)
Assign a board reviewer for reconciliations & variance reports
Pilot the two-person count this weekend (simple batch sheet)
Schedule a 20-minute call to scope an external review/fraud risk analysis.
Download our Board Oversight Packet Here:
Get our free Fraud Prevention Checklist Here.
Want to discuss your situation? Give us a call, send an email, or book a time on our calendar here.
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