Artificial intelligence has made it easier than ever to create realistic-looking invoices, receipts, and other financial documents. As a result, churches need to be more vigilant than ever.
Consider this example: A staff member or volunteer submits an expense report with a receipt attached. The amount seems reasonable, the business name is familiar, and the expense relates to a legitimate church activity. Everything appears normal, so the reimbursement is approved. Only later does the church discover the receipt was altered or entirely fabricated.
Tim Samuel, CPA and Chief Financial Officer of Bridgeway Community Church in Columbia, Maryland, recently shared several practical recommendations in the Church Tax & Law newsletter to help churches reduce the risk of invoice fraud:
- Separate submission, approval, and payment. The person requesting reimbursement should not be the same person approving it, and the approver should not be the only person responsible for releasing funds. Dividing responsibilities creates accountability and makes fraudulent payments much more difficult.
- Give unusual requests extra attention. Off-cycle reimbursements, missing information, handwritten explanations, duplicate-looking receipts, round-dollar amounts, or payments just below an approval limit should automatically receive a second documented review before any funds are released.
- Look for patterns, not just isolated transactions. Fraud often occurs through a series of small payments that appear harmless individually. Periodically review reimbursement activity, vendor payments, and exceptions to normal procedures to identify trends that don’t fit established patterns.
- Train staff and ministry leaders to verify before approving. AI can generate convincing financial documents in minutes. Everyone involved in handling church funds should understand that it is appropriate—and expected—to pause, verify information, and ask questions whenever something doesn’t seem right.
- Have a response plan in place. If fraudulent activity is discovered, your church should already know who contacts the bank, who reviews recent transactions, who preserves documentation, and who informs church leadership. A written response plan allows the church to act quickly when every minute counts.
When churches make verification a normal part of faithful stewardship, fraudsters lose one of their greatest advantages—a rushed decision made within a trusted environment.
The Missouri United Methodist Foundation is available to help your church review its financial policies and internal controls to reduce the risk of fraud. We can help you evaluate your current procedures, identify areas for improvement, and strengthen safeguards that protect your church’s financial resources.
To learn more, contact Chris Bouchard, cbouchard@mumf.org, Interim Director of Clergy & Church Financial Ministry (C2FM). A simple review today can help prevent a costly mistake tomorrow.