www.capincrouse.com operations 104 class 6—fraud
TRANSCRIPT
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Operations 104Class 6—Fraud
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Guest LecturerStan is a Principal with CapinCrouse, serving as the National Director of Outsourced Financial Services and as a member of the firm’s national consulting services team. He has over 20 years in ministry operations, public accounting, government accounting, and missionary work. He has been the COO for a large financial ministry. This leadership experience provided him the opportunity to oversee the day-to-day operations and sustainability of the ministry, which encompassed human resources, technology, sales and marketing, global presence, volunteer involvement, and funding.
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Class 6—FraudNo one wants to hear the words, “Pastor, I have to tell you about fraud that we discovered in our church.” Yet, hundreds of churches discover each year that someone has pilfered the collection plate, the offering boxes, checks for events, falsified invoices, created dummy bank accounts, and many more creative ways to steal money. Do an internet search and you will discover that millions of dollars go missing each year from local churches. This class will delve into real-life examples of fraud. Then we will study the tactics that you can enact to prevent fraud in your church.
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PRESENTED BY:
Internal Control Risks and Responses for Churches
XPastor Certification Course March 2014
Stan Reiff, CPA
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Overview
•Purpose and objectives of internal controls
•Control problems in the church
•Fraud triangle
•Risk assessment
•Internal control systems
•Internal control practices
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Purpose and Objectives
•Protect employees
•Protect the assets and reputation of the church
•Provide reliable financial information
•Detect dishonest acts
•Detect honest errors
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Control Problems in the Church
•Separation of duties
• Authorization of transactions
• Recording of transactions
• Custody of assets
•Organizational structure
• Job descriptions
• Volunteers need supervision and structure
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Control Problems in the Church, cont.
•Qualified Personnel• Pity hiring/retention
• Churches are a different kind of accounting
• Pay structure
• Training
•Accounting procedures manual
•Limited time and staff
•Lack of monitoring
•Trust
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Internal Controls Systems
•Be reasonable
•Review each significant area
• Cash receipts (contributions and others)
• Cash disbursements
• Payroll
•Consider the separation of duties for each area
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Fraud Triangle
•Incentive
•Opportunity
•Rationalization
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Risk Assessment
•Control environment
•Risk assessment
•Control activities
•Information and communication
•Monitoring
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Control Environment
•Sets the tone of the organization
•Is the foundation of internal control
•Management’s philosophy and operating style
•Ethical values and competence
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Risk Assessment
Identification and analysis of relevant risks to achievement of the objectives
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Control Activities
• Policies and procedures that help ensure management directives are carried out
• Include approvals, authorizations, verifications, reconciliations, security of assets, segregation of duties
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Information and Communication
• Pertinent information must be identified, captured, and communicated
• Information systems produce reports (operational and financial)
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Monitoring
Internal control systems need to be monitored – a process that assesses the quality of the system’s performance over time
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Control Practices
General
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Control Practices
Board Governance
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Control Practices
Cash Receipts
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Control Practices
Cash Disbursements
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Control Practices
Payroll
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Control Practices
Reconciliations
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Resources
Essential Guide to Church Finance published by Christianity Today 2009
Church and Nonprofit Tax and Financial Guide published by Zondervan 2010
www.ecfa.org
www.nacba.net
www.christianitytoday.com/yc
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Thank You for Attending Today!!!
Stan Reiff, CPA
(678) 521-0182