Key Takeaways
- When it comes to collecting church offerings, set up clear rules and separate roles: Use offer envelopes, rotate teams, and split up roles for collecting, counting, and depositing money to hold people accountable and lower the risk of financial fraud within the organization.
- Make your physical and digital security even better: Quickly secure collected money, utilize sealed and timestamped bags, ensure dual control during transfers, and use security technologies like video surveillance and check-stamping.
- Change the controls for giving online and on mobile: As more people give online, churches need to check the security measures of service providers, limit access to platforms, require audit reports, and frequently compare digital records with bank deposits and the general ledger.
Strong financial practices help churches do more than prevent fraud — they build lasting trust with members and ensure resources are used to support the mission. By putting these best practices in place, from protecting service offerings to securing digital giving, churches can create an ethical culture for fraud prevention.
Establishing effective church fraud internal controls is a key step in this process, helping leaders safeguard donations and strengthen oversight. In the end, good stewardship of church finances is not just about managing money — it’s about honoring the generosity of the congregation and strengthening the future of the ministry.
Getting to Know the Church Landscape: Trends and Statistics
Financial fraud in faith-based organizations is a growing global concern, threatening to damage the reputation and financial health of places of worship. Recent research estimates that $62 billion was lost to fraud and embezzlement in 2023 — about 6.6% of all charitable giving worldwide (Center for the Study of Global Christianity). These figures highlight the urgent need for strong financial oversight and internal controls.
10 Best Practices for Church Finances and Fraud Prevention
Managing donations with care requires both clear procedures and strong oversight. The following church finances best practices outline practical steps to reduce fraud risks, strengthen internal controls, and ensure that resources are used responsibly to support the mission.
1. Implement a Clear Collection Process
Encouraging the congregation to use designated envelopes is about more than convenience; it’s a key part of transparency. This method not only makes sure that each donation is properly recorded, but it also serves to create a culture of openness in the church community.
2. Incorporate Checks and Balances
Using a multi-step method for collecting offers creates a system that protects against potential risks:
• Having different teams for collecting and counting helps make sure that everyone is accountable from the time of collection to the time of final reconciliation.
- Rotating team members not only keeps them from getting too comfortable, but it also makes them feel like they are all responsible.
3. Add Security After Collection
The security of offerings shouldn’t end with collection. Take these steps to further enhance the security of collected funds:
- Don’t leave offerings with only one person.
- Quickly move offerings to a secure room once they are collected
- Count offerings on the same day, if possible, to lower the chance of mistakes.
4. Take Extra Security Steps in Delayed Counting
When counting must be delayed, taking extra precautions is essential:
- Put donations in sealed bags with obvious date and time stamps.
- Keep bags in a secure drop slot with limited access to make sure the money is safe until it can be counted properly.
- Always retrieve the money bags with two other people present.
5. Include Strict Rules for Counting
A secure environment for the counting process is vital.
- A room with video surveillance not only protects the counting process, but it also acts as a deterrent.
- Designating an original count person next to a second verifier reduces the risk of errors and misconduct.
- Grouping donations by type (cash, checks, envelopes, non-envelopes) and purpose (general fund, designated fund, limited fund) makes it easier to keep track of records and promotes transparency.
6. Manage the Check Deposit Process
Stamping all checks with “For Deposit Only” may seem like a simple step, but it’s a crucial one. This practice prevents unauthorized endorsement and adds a layer of protection against potential fraud.
7. Split Up Responsibilities
Separation of duties is one of the most important parts of good internal controls to prevent fraud:
- Limiting access to the general ledger and member contribution data for people who are involved in collecting, counting, and handling deposits reduces the chances of wrongdoing.
8. Ensure a Robust Review and Reconciliation Process
Thorough reconciliation and regular reviews are essential to maintaining financial integrity:
- The key to accuracy is carefully checking count sheets, deposit slips, the general ledger, and records of member contributions.
- Having important church financial figures take part in the review process provides another level of supervision.
9. Protect Giving Online and on Mobile
Significant amounts of money are received by churches via online websites, mobile apps, or text, which can bring additional risks. The following are steps to take to help manage risk of online and mobile giving:
- Ensure that the online/mobile giving service provider has appropriate controls in place to set up and validate bank accounts, as well as securely process transactions and protect user data and account information.
- Limit access and ability to make changes to the online/mobile giving platform.
- Require the service provider to send monthly reports with notifications of any new users added or changes to bank account information.
- Reconcile weekly or monthly online/mobile giving reports to the deposits into the bank account and amounts recorded in the general ledger and member contributions records.
10. Strengthen Oversight of Church Service Offerings
While earlier best practices focus on how offerings are collected and secured, effective oversight ensures that these funds are used responsibly after they’ve been received. This is where leadership and governance play a critical role.
Ways to strengthen oversight include:
- Regular financial reporting: Share clear, consistent updates with leadership teams and the congregation about how offerings are allocated.
- Budget accountability: Ensure that service offerings are tracked against the church budget and mission priorities, reducing the risk of misallocation.
- Independent evaluation: Periodically engage external advisors or auditors to review internal controls and provide objective recommendations.
- Congregational education: Teach members how offerings support the mission, reinforcing both financial stewardship and transparency.
This level of oversight turns offerings from a transaction into a shared commitment, showing members that their generosity is managed with care and aligned with the church’s mission.
Need help strengthening your church’s financial controls?
LBMC’s Chattanooga advisors specialize in audit and internal control services for faith-based organizations.
Protecting Our Commitment to Giving
In today’s environment, trust is one of the church’s most valuable assets. By putting these church finances best practices into action, leaders can reduce fraud risks, strengthen accountability, and nurture a culture of transparency. Beyond safeguarding money, effective internal controls and periodic internal audits help protect the integrity of the ministry and honor the generosity of every member.
As technology changes the ways we give, the heart of offerings remains the same — a reflection of faith and a commitment to one another. Strong stewardship ensures that every contribution continues to support the mission and strengthen the future of the church community.
Content provided by Steve Thomason, Managing Director in LBMC’s Audit practice. Contact Steve at steve.thomason@lbmc.com.