April 11, 2007
Pass the collection plate
A survey by researchers at Villanova University has found that 85 percent of [U.S.] Roman Catholic dioceses that responded had discovered embezzle-
ment of church money in the last five years, with 11 percent reporting that more than $500,000 had been stolen.
The Catholic Church has some of the most rigorous financial guidelines of any denomination, specialists in church ethics said, but the survey found that the guidelines were often ignored in parishes. And when no one is looking, the cash that goes into the collection plate does not always get deposited into the church’s bank account.
“As a faith-based organization, we place a lot of trust in our folks,” said Chuck Zech, a co-author of the study and director of the Center for the Study of Church Management at Villanova.
“We think if you work for a church — you’re a volunteer or a priest — the last thing on your mind is to do something dishonest,” Mr. Zech said. “But people are people, and there’s a lot of temptation there, and with the cash-based aspect of how churches operate, it’s pretty easy.”
It must be, if one in ten dioceses gets taken for more than half a million bucks.
Officials at the United States Conference of Catholic Bishops said they had seen the study, which was released just before Christmas and was first reported in the National Catholic Reporter, and were considering ways that parishes could tighten their financial controls.
“The Villanova study does not come as a surprise,” said Bishop Dennis M. Schnurr, treasurer of the bishops’ conference. “This is something that the bishops in this country have been looking at for some time. They are aware of a need to look for mechanisms that can assist parishes in accountability and transparency.”
… Many nonprofit organizations that accept cash donations experience theft, and churches are particularly vulnerable, said John C. Knapp, director of the Southern Institute for Business and Professional Ethics, at Georgia State University in Atlanta.
“Churches have a tendency to be in denial about the potential for this conduct in their midst,” Mr. Knapp said. “When ethics seminars or ethics codes are proposed in churches, they are often met with resistance from people who say, ‘Why in the world would we need this? After all, this is the church.’ Whereas in business, people readily recognize that this sort of thing can happen.”
… In the Catholic Church, parishes and high schools handle many cash transactions, making them vulnerable to theft, the Villanova report notes.
Canon law requires each parish to have a finance council to provide oversight. But Bishop Schnurr, who heads the diocese in Duluth, Minn., said there were no standards for how finance council members were chosen or whether they should have any expertise in accounting or finance.
Only 3 percent of the dioceses said they annually conducted an internal audit of their parishes, and 21 percent said they seldom or never audited parishes, the survey found.
… Jack B. Siegel, a tax lawyer and expert on nonprofit management who has commented on church fraud on his blog, charitygovernance.com, said he kept a tally of church frauds and was surprised by how many occurred at Catholic churches.
“I got interested because I thought, wait, I’ve heard a lot about pedophilia, why aren’t I hearing about these financial problems,” Mr. Siegel said.
Maybe the cash pays off the kids.
[Recycled post: I’m traveling. Originally published on January 5th 2007.]
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