CPA's & Consultants Providing Business Insight To Churches & Ministries

Controls! One Key to Preventing Fraud (4 of 7)

The first step to prevent fraud is to ensure that controls are in place. These controls may be as simple as having background checks performed on people working with the financial department of the organization.

The following are some examples of preventative controls, but they are not all-inclusive.

* Creating a Culture of Honesty and High Ethics

Are You Ripe For Fraud? (3 of 7)

This is a 3rd part posting of understanding fraud and the implications on the organization. In part 1, we discussed that churches, just like any organization, is susceptible to fraud. In an April 23, 2001 article by Christianity Today headlined "Jury Convicts Greater Ministries of Fraud," five leaders were convicted in Federal Court on 72 counts of conspiracy, wire and mail fraud, and money laundering, in one of the largest church fraud schemes in American history.

Is your organization's environment ripe for fraud?

Is It Fraud? Characteristics You Should Look For! (2 of 7)

Understanding fraud and who may be susceptible to commiting fraud is a series of postings to help church and ministry leaders understand management's responsibility. In a 2001 magazine article, 5 ministry leaders were convicted on 72 counts relating to fraud. Fraud? In the Church? You bet. The Church is not isolated nor "exempt".

The Primary factor that distinguishes fraud from error is whether the underlying action that results in the misstatement of the financial statements is intentional or unintentional.

Some characteristics of fraud are:

Extra Cash? (5 of 5)

As discussed in our previous posts for maximizing the effects of investing spare cash…If you have extra cash lying around:
·first max out your 401(k) or 403(b) contributions for 2006,
·second, liquidate high interest rate credit card debt,
·third, participate in a college savings plan if it provides state income tax savings. and now…

"I Didn't Know!" Why is Fraud Rising in the Church? (1 of 7)

"My people are destroyed for lack of knowledge..." Hosea 4:6 - King James Version

The Church is the place of salvation, healing, deliverance, transformation and deployment of people into his/her giftedness. Many of the people that enter the church doors struggle in various areas of their lives. Some may struggle with stealing, embezzlement, unlawful desires, etc. Helping individuals overcome these issues and engaging them in ministry is one of the hardest challenges faced by local congregations.

Extra Cash? (4 of 5)

As discussed in our previous posts for maximizing the effects of investing spare cash…If you have extra cash lying around first max out your 401(k) or 403(b) contributions for 2006, second, liquidate high interest rate credit card debt and now…#3 according to Gregory Geisler’s article in the September 2006 Journal of Accountancy, The Best Use of Spare Cash, Participate in a College Savings Plan If it Provides State Income Tax Savings. With the ever increasing costs of higher education, individuals with spare cash should investigate state=sponsored tax-advantaged college savings plans.

Extra Cash? (3 of 5)

As discussed in our previous posts for maximizing the effects of investing spare cash…If you have extra cash lying around first max out your 401(k) or 403(b) contributions for 2006, then…according to Gregory Geisler’s article in the September 2006 Journal of Accountancy, The Best Use of Spare Cash, the next most effective strategy is to pay down high-interest-rate debts, particularly credit card balances. Pay off debts in order of their after-tax interest rates, beginning with the highest.

Extra Cash? (2 of 5)

If you have extra cash lying around…consider that one of the most important uses is to increase retirement account contributions to the maximum employer match. According to Gregory Geisler’s article in the September 2006 Journal of Accountancy, The Best Use of Spare Cash, contributions to 401(k) or 403(b) retirement accounts that are fully matched by the employer yield an immediate return equal to the employers’ matching percentage.

Extra Cash lying Around? (1 of 5)

According to Gregory Geisler in the September 2006 Journal of Accountancy article, The best use of Spare Cash
When individuals receive an income tax refund, a bonus, an inheritance or another windfall, or even have some extra cash on hand after paying off their bills – they have a number of options. The most prudent choices are investing, putting money in college savings or retirement accounts, or paying off debts.
CPAs can help in determining the “best use” of these extra funds, by assessing the the following three criteria:
1. the after tax rate of return,
2. risk

Make cash while contributing property…

You can make cash and contribute property at the same time. How? By making a “bargain sale” to a charity. Sell the property for a bargain rather than selling at full price on the market and get a charitable contribution deduction for the fair market value less the selling price to the charity. Double benefit for the giver!! Of course you would need to report capital gains on the sale of the property. The charity in turn would give the donor a statement that cash was given in exchange for the gift.