Handling your church’s finances can be difficult and unique challenges may arise. There are many churches that have lost valuable assets because they did not have the right legal protection or the correct people handling their accounts. Dishonesty and fraud are two common occurrences that happen within the finances of all organizations, including churches. Churches often have limited resources and less staff than other organizations, which makes fraud harder to catch right away. This puts a church in a vulnerable state and their assets at risk.
The church law attorneys at Anchor Legal Group, PLLC understand how important it is for churches to have legal representation and are skilled in helping churches expand their mission and run successfully. Legal issues arise within all organizations, but without proper representation, lawsuits may cause churches to fail.
Why Do Churches Get Sued?
Church attorneys have seen an uptick in church lawsuits over the past decade. There are common reasons why church lawsuits are happening more frequently. These include:
Churches operate debt free: Strong and healthy churches are those that operate debt free. Churches do their best to try and avoid debt and if they do incur it, through land or building purchase, they try and pay it off as soon as possible. Through paying off debt quickly, churches gain equity, which can be an easy target for lawsuits. If a church gets sued over their equity, this may force the church to mortgage their land and property, putting them into more debt than they started with. Churches also transfer property frequently and deal with lease and rental agreements that may change where the possession of assets are located, causing lawsuits to ensue if money is misplaced.
Church insurance policy: Many churches have liability insurance polices but do not pay attention to safety hazards within their buildings or property. Churches get sued often due to not having correct policies or from injuries on their property.
Ways to Protect a Church’s Assets
There are a few ways to strengthen control over a church’s assets and protect finances:
Church bank account safety: All church bank accounts should be managed in the church office. Any deposits, checks, or other money sources should be handled through the church office, rather than any outside parties. All accounts, including the main checking account and any other bank accounts, should be handled by one central finance team. Many times, a church will have individuals from outside of the church handle different accounts. This presents an opportunity for these individuals to take checks or cash for their own personal use. All money handling should be done inside the church to keep all assets safe from getting into the wrong hands.
Review bank statements: It is important to review all bank statements and checks that have been written from the church’s account. This will ensure that none of the employees who have access to the account are cutting inappropriate check amounts for themselves. To handle this properly, have someone who does not work within the accounting department review all bank statement history each month. Have them check to make sure all checks are being written to legitimate vendors and that all transfers are being made between church accounts, not personal accounts. Always have someone look over the monthly statements to help prevent fraud from occurring.
Limit access to the safe: Churches handle a significant amount of money, especially cash, during services. The weekends are the busiest times for churches, and they will take in thousands of dollars from collections. Since multiple people are usually involved in the collection process, this presents access to fraud if not handled properly. Never allow one person to be alone with collections and have at least two people present when delivering the collection to the safe. Also, use a tamperproof bag to store collection money. If money is not put in a tamperproof bag, this gives anyone with access to the safe the opportunity to steal from the church. The number of people who have access to the safe should be as minimal as possible and tamperproof bags should be used.
Restrict access to specific areas: Limiting access to the safe is important as well as restricting access to certain areas of a church. Many criminals see churches as easy access due to their limited staff and empty buildings full of valuable artwork and money from collections. Consider implementing an access control system to restrict access to certain areas and provide dates and times of who entered these places. The more security, the better.
Install video surveillance systems: Installing a video surveillance system will further increase the protection of a church’s assets. This will keep track of suspicious activity and discourage fraud from happening. Make sure to post signs that video surveillance is present and do not install cameras in bathrooms, confessionals, or other areas of expected privacy.
Create procedures to enhance safety: Many churches do not consider safety when better maintaining their ministries. Make sure that a church has policies in place on how to handle unexpected incidences during worship services. Not everyone has good intentions when going to church and may be after assets through a lawsuit.
Communication is key: Talk to everyone involved in the ministry so that they know what is going on and the new implications being made to protect the church’s assets. Ensure that the church’s staff knows that new policies are in place for their protection and not due to lack of trust.
Why Should My Church Hire a Legal Team?
When assets are unprotected, they are at a greater risk of being lost or stolen. Creditors may be able to take away assets very easily if they are not protected. This would cause a church to shut down due to the lack of funds. It is important to have a church attorney to protect assets and make sure there are no victims of fraud. It is always better to be protected than a victim of stolen funds. There are many liabilities and fraud activities that are hard to notice.
Church Law Attorneys at Anchor Legal Group, PLLC Dedicate Themselves to Protecting Church Assets
Churches are vulnerable to fraud, theft, and lawsuits. Church founders and administrators should be proactive with hiring a church attorney to ensure that the rights and assets of the church are protected. The church law attorneys at Anchor Legal Group, PLLC are skilled in church litigation and will ensure that your church’s assets are well taken care of. Learn more about how our attorneys can help you by contacting us online or by calling us today at 757-LAW-0000 to schedule an initial consultation. Located in Virginia Beach, we serve clients throughout Virginia Beach, Chesapeake, Norfolk, Suffolk, Portsmouth, Newport News, Hampton, and Eastern Shore. We also serve our clients throughout the United States through our network of associated attorneys.