A recent study reveals some compelling statistics about fraud, effective financial controls, and cash reserves in churches.
The study, done by LifeWay, indicates that:
- The prevalence of fraud rises as the size of the church increases, with parishes of more than 250 persons experiencing a 12% incidence of fraud.
- 47% of churches have had an audit within the last year, but 10 percent have never had one.
- Many churches operate with dangerously low cash reserves; 26 percent have enough cash on hand to survive for seven or fewer weeks, with 24 percent have enough to cover eight to 15 weeks operating expenses. Fifteen percent have enough for 16 to 25 weeks, 12 percent have reserves sufficient to cover 26 to 51 weeks. Twenty three percent have enough to cover a year or more.
- One third of churches have experienced financial struggles.
My take: The percentage of fraud is a little low. Fraud Magazine suggests that the number of reported cases vastly outstrips those that are, and finds that 13 percent of churches have experienced fraud.
Read more here.