42-year-old Anita Guzzardi worked at the Philadelphia archdiocese since the ripe old age of 20, […]
Remember this guy?
If you recall, Hector Sanchez swiped $40k from his church to spend in “casinos and restaurants” which is arguably the lamest thing you could do with forty large of a God’s money. What about spending it on a facial to soften that nice bone structure? Yeesh.
For the very last time: just because you are a non-profit does not mean you can operate recklessly with minimal internal controls and/or no controls at all.
Case in point, this Fresno church accounting manager who may have stolen $2 million from the church she spent 13 years working for.
51 year-old Sandra Arreola pleaded not guilty last Friday to charges that she borrowed $2.1 million from church tithes and offerings and used the money for properties, bills, vacations and clothing. Pastor Mike Robertson of Visalia First Assembly of God Church says the church noticed about two years ago that something was fishy with Arreola’s accounting. “A few regularities began to surface while testing the payroll system. Additional discrepancies in the handling of contributions came to light as a result of a further internal investigation in conjunction with a forensic audit.”
Of course, had the church been in the practice of doing regular audits in the first place (or at least open to some really reasonable internal control suggestions), it wouldn’t have to call the cops on its trusted employee and send her to jail over $2 million. Robertson says the church’s insurance policy will recover some of that money but that’s not the point. The church has since installed security cameras “to prevent fraud” – not exactly the sort of proactive stance we support around here.
Church member Becky Maze had only nice things to say about our little crook, saying Arreola was “always willing to help” and “a lovely hostess. One of the things she was well-known for was liking to have a tea for the women, and making the little cookies and desserts — the froufrou kind of things.”
Froufrou isn’t cheap, you know. There’s your motive.
Just goes to show that the religious and God-fearing might be exempt when it comes to taxes but not when it comes to the temptation to take when motive, opportunity and/or rationalization are at work. Hallelujah!
Church accountant accused of embezzling more than $2 million [The Fresno Bee]
Presented by Serenic Software. Download our free whitepaper – “5 Key Reasons Why Great Financial Management is So Important for Your Nonprofit Now”
Just because you’re a church doesn’t mean you shouldn’t have a remedial understanding of payroll, GAAP, taxable income, and right/wrong.
Anthony and Harriet Jinwright, husband and wife pastors from Charlotte-based Greater Salem City of Good church, were warned repeatedly that their lazy accounting could get them in trouble, including by a former consultant in 2001.
Some issues brought up by the consultant include (but a ited to and are, of course, alleged violations at this point):
• Church donations going directly to Pastor Jinwright but not subsequently appearing on his tax forms
• Blatant violation of the sanctity of GAAP.
• Expense reimbursements to Pastor Jinwright without benefit of receipts nor an expense plan at the church.
• Mismatched deposit envelopes that did not contain the actual amounts reflected on the outside when deposited.
For the love of sweet baby Jesus, what sort of operation were they running over there?!
It appears to be one part run-of-the-mill scam, one part complicated church theft, although Jinwright refused to acknowledge that any of this could be considered suspicious or, worse, fraudulent. The couple deposited $7 million into their bank account from 2002 to 2007 while only reporting $3.3 million for the tax returns for those years.
The US District Court thinks otherwise and “can I get a witness?” has just taken on a whole new meaning as Jinwright’s former assistant and business administrator – as well as the former consultant – have appeared on the witness stand to discuss Greater Salem’s, uh, holier-than-thou accounting tricks:
Anthony Jinwright was not only pastor of Greater Salem Church but also chairman of the church’s board or directors, with sway over the “business and financial dealings of the church.”
Although the church paid the bishop a regular salary, which it reported on his regular W-2 form, Greater Salem also cut checks directly to the bishop and his wife for: vehicle and housing allowances, retirement income, “tax liabilities,” personal vacation and travel, their daughter’s college tuition and at least two types of bonuses – a bonus at Christmas and a “pastoral anniversary” every February.
Both the Jinwrights also collected separate fees for speaking at other churches around the country.
Now listen, I’m sure Jesus wanted little baby Jinwright to go to college but the problem is that the meeting minutes that supposedly contain an authorization from church board members to pay for said college education have, um, disappeared. Funny, didn’t that happen at Arthur Andersen when Enron blew up?
What’s the lesson here? Churches are no less responsible for their financial affairs than publicly-traded companies and in many ways should operate with greater transparency as they are not only partially-funded by members of the congregation but supposedly on some sort of divine mission.
Do you really want to have to explain to the Almighty why you faked his financials at the pearly gates? Didn’t think so.
Jinwrights: Did they hide millions? Or miss details? [Carolina Weekly]
Other Holy Men:
Former Pastor Figures Eighth Commandment Is Overrated, Steals from Nonprofit
I had no idea how much a minister can make but now I do. Wait a minute, this just tells me how to bypass Service rules by writing checks in the church’s name. I might totally be in the wrong line of work.
Free Church Accounting (I’m not kidding) brings us a question from “Sharon” of Corsicana, Texas:
How much money does a minister have to make in order for money to be reported?
I started my church back up after 12 years vacancy. I do not have very many members. Right now we are 3 active members and other people stop in from time to time. I do not actually receive money. Since the church is striving I use the money to pay the light bill, get the grass moved.
According to the IRS website, “Earnings of $400 or more are subject to self-employment taxes.” (that includes qualifying ministers)
If you are a church employee, income of $108.28 or more is subject to SE tax.
It would be better for you, if you opened a checking account in the church’s name and paid expenses out of it. If that’s not possible, just make sure and keep all of the receipts that show where the church funds are going.
Fascinating! I took the preliminary “Are You a Tax-Exempt Church” quiz on their website and failed miserably so I guess I’d make an awful 501(c)(3) but that’s probably for the best.
There are ways to fail at this of course, like the Spokane, WA priest who couldn’t keep his arms and legs (and other parts) inside of the vehicle at all times, financial mismanagement in the University of North Carolina system, and JDA favorite the University of Colorado’s wild credit card user with horrible hair.
I would never imply that more regulation is the answer; I’m merely pointing out that there’s a bit of work to be done in identifying non-profit fraud. Seriously, how can one detect fraud when the core basis of fund accounting is an imbalance between “expenses” and expenditures?
The Church of Jr Deputy Accountant Scientist? I’m down.